City of New York v. Wall Street Racquet Club, Inc.

Decision Date29 July 1987
Citation518 N.Y.S.2d 737,136 Misc.2d 405
PartiesThe CITY OF NEW YORK, Petitioner, v. The WALL STREET RACQUET CLUB, INC., "John Doe" and "Jane Doe", Respondents.
CourtNew York City Court

Jeffrey Schanback, Terri Feinstein Sasanow, of counsel; Peter L. Zimroth, Corp. Counsel, New York City, for petitioner.

Michelle S. Babbit, of counsel; Stroock & Stroock & Lavain, New York City, for respondents.

LEWIS R. FRIEDMAN, Judge.

In this commercial holdover proceeding respondent moves to dismiss asserting lack of personal jurisdiction, a defective notice to quit, and a prior action pending between the parties; respondent also seeks discovery. Petitioner cross-moves to dismiss the counterclaims. The motion to dismiss for lack of personal jurisdiction presents an important question that has not been explicitly resolved in the reported cases: whether service on a corporate tenant must comply with CPLR 311, the general provision for service on corporations, as well as RPAPL 735, the service provision for summary dispossess proceedings.

The material facts are not in dispute: the petitioner's process server left a copy of the petition and notice of petition with one of respondent's employees working at the subject premises. The person served is not an officer or other person specifically authorized under CPLR 311 to accept service. Appropriate mailings were done.

In pertinent part RPAPL Section 735 provides:

Service of the petition and notice of petition shall be made by personally delivering them to the respondent; or by delivering to and leaving personally with a person of suitable age and discretion who resides or is employed at the property sought to be recovered, a copy of the petition and notice of petition, if upon reasonable application admittance can be obtained and such person found who will receive it * * *

The service here concededly meets that requirement.

In Grabino v. Howard Stores Corp., 111 Misc.2d 54, 443 N.Y.S.2d 626 the court held that the person "employed at the property sought to be recovered" should be interpreted in light of CPLR 311 which authorizes "personal service" on a corporation only by delivery to a specified list of corporate officials. This court finds that in light of the history of RPAPL 735 the discussion in Grabino of CPLR 311 is inapposite to a proceeding under RPAPL Article 7.

RPAPL 735 originally required service "in the same manner as personal service of a summons in an action". In 1965 the Legislature deleted that language and substituted "personal delivery". L.1965, c. 910, 7. The revision of RPAPL Section 735 created a complete regime for the service of process, unrelated to the service provisions of the CPLR or any other statute. The provisions for mailing after "substituted" or "conspicuous place" service include separate details for mailing to corporations and to individuals, indicative of legislative intent to have RPAPL 735 apply to both corporations and individuals. This history led the court in 1405 Realty Corp. v. Napier, 68 Misc.2d 793, 794, 328 N.Y.S.2d 44 to conclude that the Legislature intentionally deleted the requirement of "due diligence" before a resort to "substituted" service is permitted under RPAPL 735. Similarly, in Puteoli Realty Corp. v. Mr. D's Fontana Di Trevi Rest., Inc., 95 Misc.2d 108, 407 N.Y.S.2d 118 the court found that RPAPL 735 should not be read together with BCL 306 allowing service on the Secretary of State.

The language of RPAPL 735 itself clarifies that "personal service" the term used in CPLR 311 and 308(1) is not intended; "personal delivery", a different, less inclusive term is used. (See e.g., Rodgers v. Rodgers, 32 A.D.2d 558, 300 N.Y.S.2d 275; Wakerman Leather Co., Inc. v. Irvin B. Foster Sportswear Co., Inc., 27 A.D.2d 767, 277 N.Y.S.2d 56; Matter of Weill v. Erickson, 49 A.D.2d 895, 897, 373 N.Y.S.2d 370, aff'd 37 N.Y.2d 851, 378 N.Y.S.2d 39, 340 N.E.2d 473). "Personal delivery" in CPLR 311 and 308(1) means "in hand delivery". The same usage appears in CPLR 317 where defaults can be vacated in certain cases where there has not been "personal delivery". (Cf. Wakerman Leather Co., Inc. v. Irvin B. Foster Sportswear Co., Inc, supra; see Eugene DiLorenzo, Inc. v. A.C. Dutton Lumber Co., Inc., 67 N.Y.2d 138, 501 N.Y.S.2d 8, 492 N.E.2d 116. Similarly RPAPL 771(5)(a) contains its own regime of service which distinguishes between "personal delivery" and other forms of service for the commencement of proceedings for the appointment of an administrator. (See Department of Housing Preserv. & Dev. v. Arick, 131 Misc.2d 950, 954, 503 N.Y.S.2d 489 for an analysis of these and similar statutes). It is reasonable to conclude, therefore, that service under RPAPL 735 alone is sufficient without regard to "personal service" under CPLR 311.

The Appellate Term, First Department has recently found acceptable under RPAPL 735 "substituted service" on a corporation where there had been delivery of the papers to a person who was not even employed by the corporation. (525 Park Ave. Assoc. v. Nathaniel Kwit, M.D., P.C., NYLJ July 15, 1987, p. 11, col. 1). The court found a physician, an undertenant sharing the premises and receptionist, to be "a person of suitable age and discretion who ... is employed at the property to be recovered". (But cf. Ilfin Co., Inc. v. Benec Indus., Inc., 114 Misc.2d 411, 413-414, 451 N.Y.S.2d 643 finding an employee of another corporation sharing the office not to be a "person of suitable age and discretion").

The question asked to determine the validity of any service is whether its manner is calculated to adequately and fairly apprise the respondent of the impending lawsuit. (417 East Realty Assoc. v. Ryan, 110 Misc.2d 607, 610, 442 N.Y.S.2d 880). The Legislature reasonably concluded that in the case of summary proceedings for the recovery of premises notice to any person of "suitable age and discretion who ... is employed at the property to be recovered" is sufficient. (Cf. Fashion Page v. Zurich Ins. Co., 50 N.Y.2d 265, 271, 428 N.Y.S.2d 890, 406 N.E.2d 747). There is no allegation here that respondent did not learn of the action through the service actually employed.

This proceeding was properly commenced by service on respondent's employee regardless of her status in the corporate hierarchy or whether she stated to the process server that she was authorized to accept service.

The failure to serve fictitious parties, "John Doe" and "Jane Doe", does not invalidate the proceeding. The service of a single copy of the papers on respondent's employee is therefore sufficient. (Compare Raschel v. Rish, 120 A.D.2d 945, 502 N.Y.S.2d 852; ...

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