Extensions of Time to Serve Process Under CPLR 306-b Revisited
Print Article- Posted on: Jul 2 2021
Today’s Blog relates to extensions of time to serve a defendant under CPLR 306-b, a topic previously addressed by this Blog [HERE] and [HERE]. The background discussion in today’s Blog was taken from one of the linked prior Blogs.
Under the present “commencement by filing” system, an action (or proceeding) (collectively, an “Action”) is commenced by filing (CPLR 304(a))the initiatory paper(s) with the “clerk of the court in the county in which the [A]ction … is brought or any other person designated by the clerk of the court for that purpose (CPLR 304(c)). Once an Action is commenced, the plaintiff (or petitioner) (collectively, a “Plaintiff”) must effectuate service of process pursuant to the parameters of CPLR 306-b, which provides:
Service of the summons and complaint, summons with notice, third-party summons and complaint, or petition with a notice of petition or order to show cause shall be made within one hundred twenty days after the commencement of the [A]ction, provided that in an [A]ction, except a proceeding commenced under the election law, where the applicable statute of limitations is four months or less, service shall be made not later than fifteen days after the date on which the applicable statute of limitations expires. If service is not made upon a defendant within the time provided in this section, the court, upon motion, shall dismiss the action without prejudice as to that defendant, or upon good cause shown or in the interest of justice, extend the time for service.
Among other things, CPLR 306-b provides that, in general, service of process on a defendant (or respondent) (collectively, a “Defendant”) must be effectuated within 120 days of the commencement of an Action. The Court of Appeals in Leader v. Maroney, Ponzini & Spencer, 97 N.Y.2d 95 (2001), explained the history of CPLR 306-b.
According to Leader, “[a]s originally enacted in 1992, CPLR 306-b transformed New York from a commencement-by-service to a commencement-by-filing jurisdiction.” Leader, 97 N.Y.2d at 100 (citation omitted). Plaintiffs were “considerabl[y] benefit[ed]” by “making the act of filing the point at which a claim is interposed for Statute of Limitations purposes.” Leader, 97 N.Y.2d at 100 (citation omitted). Under the old statute, a Plaintiff was afforded 120 days to effectuate service of process and the Action would be “deemed dismissed” if service was not timely made. Leader, 97 N.Y.2d at 100 (citation omitted). “The plaintiff was free to commence a new [A]ction and serve process within a second 120-day period from the date of the automatic dismissal, even if the Statute of Limitations had expired.” Leader, 97 N.Y.2d at 100 (citation omitted). For a variety of reasons, the “deemed dismissed” provisions of the old statute were considered “unnecessarily harsh” and were amended to provide that if service of process is not made within the 120-day period after the commencement of the Action, an unserved Defendant can move for the dismissal, without prejudice, or the court could extend Plaintiff’s time to serve a Defendant “upon good cause shown or in the interest of justice.” Leader, 97 N.Y.2d at 101 (citing CPLR 306-b).
The Leader Court, in a trio of cases, was called upon to determine the circumstances under which a Plaintiff would be permitted to avail itself of the extension provisions of CPLR 306-b. Importantly, the Leader Court made clear that, under CPLR 306-b, “good cause” and “the interest of justice” are “two separate standards by which to measure an application for an extension of time to serve” a Defendant if service is not made within 120 days of the commencement of an Action.
Good Cause
“To establish good cause, a plaintiff must demonstrate reasonable diligence in attempting service.” Bumpus v. New York City Tr. Auth., 66 A.D.3d 26, 31 (2nd Dep’t 2009) (citing Leader). “Good cause will not exist where a plaintiff fails to make any effort at service or fails to make at least a reasonably diligent effort at service.” Bumpus, 66 A.D.3d at 31 (citations omitted). Where “good cause” is not established, “courts must consider the ‘interest of justice’ standard of CPLR 306-b.” Bumpus, 66 A.D.3d at 32 (citations omitted).
Interest of Justice
To satisfy the “interest of justice” standard, a court must “careful[ly]” analyze “the factual setting of the case and … balance[e] … the competing interests presented by the parties.” Leader, 97 N.Y.2d at 105. Significantly, the Leader Court made clear that to satisfy the “interest of justice” standard, “a plaintiff need not establish reasonably diligent efforts at service as a threshold matter,” although it may consider plaintiff’s efforts to serve a defendant as one of many factors in its analysis. Leader, 97 N.Y.2d at 105. In determining whether the “interest of justice” compels the granting of the extension, the court may consider “any other factor in making its determination, including expiration of the Statute of Limitations, the meritorious nature of the cause of action, the length of delay in service, the promptness of a plaintiff’s request for the extension of time, and prejudice to defendant.” Leader, 97 N.Y.2d at 105-6 (footnote omitted). The “interest of justice” standard is broader than that of “good cause” and is meant to “‘accommodate late service that might be due to mistake, confusion or oversight, so long as there is no prejudice to the defendant.’” Nationstar Mortgage, LLC v. Wilson, 176 A.D.3d 1087 (2nd Dep’t 2019) (quoting Leader).
JPMorgan Chase Bank, NA v. Gluck
In deciding JPMorgan Chase Bank, NA v. Gluck on June 23, 2021, the Second Department had occasion to address several issues under CPLR 306-b. JPMorgan was a mortgage foreclosure action commenced against Gluck in May of 2011. Shortly after the commencement of the action, Gluck transferred his interest in the subject property to Landau. Subsequently, Gluck moved to dismiss the complaint pursuant to CPLR 306-b and, in December of 2013, supreme court granted Gluck’s motion because “plaintiff failed to establish due diligence in attempting to serve Gluck via the personal service method in CPLR 308(1) or the “leave and mail” method in CPLR 308(2), and thus, … service pursuant to the “nail and mail” method in CPLR 308(4) was not authorized.”
In August of 2014, eight months after the order dismissing the action, Landau transferred his interest in the property back to Gluck. In September of 2018, supreme court “denied … plaintiff’s motion to serve a supplemental summons on Gluck, without prejudice to the plaintiff commencing a new action against Gluck or moving to extend the time to serve Gluck.” Thereafter, based on supreme court’s prior decision, plaintiff moved pursuant to CPLR 306-b to extend the time to serve Gluck in the pending action alleging good cause because “it promptly moved for the extension after being directed to do so by the [court].” Supreme court denied the motion “holding that the court had already dismissed the action insofar as asserted against Gluck for lack of personal jurisdiction.”
On plaintiff’s appeal, the Second Department affirmed, but for different reasons. The Court rejected supreme court’s denial of the motion “because the complaint had already been dismissed insofar as asserted against Gluck,” and, in so doing, stated:
[t]his Court recently “reject[ed] the view that [a] motion pursuant to CPLR 306-b to extend the time for service, made in a pending action but after the Supreme Court issued an order granting a motion to dismiss based on lack of personal jurisdiction, should [be] denied without consideration of its merits” (State of New York Mtge. Agency v Braun, 182 AD3d 63, 64). An action is deemed pending until there is a final judgment (see CPLR 5011; State of New York Mtge. Agency v Braun, 182 AD3d at 68; Cooke-Garrett v Hoque, 109 AD3d 457, 457). Here, no judgment has been entered. “Inasmuch as no judgment was entered dismissing the action, the action was pending when the plaintiff moved to extend the time to serve [Gluck] with process” (U.S. Bank NA. v Saintus, 153 AD3d 1380, 1382; see State of New York Mtge. Agency v Braun, 182 AD3d at 69). Accordingly, the Supreme Court erred in denying the plaintiff’s motion without consideration of the merits (see State of New York Mtge. Agency v Braun, 182 AD3d at 67-69). (Hyperlinks added, brackets in original.)
After explaining the “good cause” and “interest of justice” standards along the lines set forth supra, the Court found that plaintiff satisfied neither standard and stated:
Here, when the Supreme Court granted Gluck’s motion to dismiss the complaint insofar as asserted against him for lack of personal jurisdiction-in 2013-the court specifically stated that the plaintiff had failed to exercise diligence in attempting to serve Gluck pursuant to CPLR 308(1) and CPLR 308(2). The plaintiff fails to dispute that conclusion on appeal, and thus, the plaintiff has failed to demonstrate good cause within the meaning of CPLR 306-b.
Nor has the plaintiff demonstrated that an extension of time is warranted in the interest of justice. [The Court then considered the interest of justice standard as set forth supra, in Leader, 97 N.Y.2d at 105-106).]
Here, in view of the more than five-year delay of the plaintiff in seeking this extension of time, and the lack of any excuse for the delay, the extension is not warranted in the interest of justice (see Slate v Schiavone Cons tr. Co., 4 NY3d 816; Rodriguez v Consolidated Edison Co. of NY., Inc., 163 AD3d 734, 736). (Hyperlinks and bracketed language added.)
