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Extensions of Time to Serve Process Under CPLR 306-b

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  • Posted on: Oct 25 2019

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According to Leader, “[a]s originally enacted in 1992, CPLR 306-b transformed New York from a commencement-by-service to a commencement-by-filing jurisdiction.”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 deemed “unnecessarily harsh” and was amended.

Thus, the statute was 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).

By Decision and Order dated October 23, 2019, the Appellate Division, Second Department, performed a CPLR 306-b analysis in Nationstar Mortgage, LLC v. Wilson.  The plaintiff in Nationstar, after a series of assignments, became the holder of a note and mortgage that was in default.  In October of 2014, Nationstar commenced a foreclosure action and, within a week, “purportedly” served a defendant by suitable age and discretion at the property being foreclosed. Defendant answered, asserted a defense based on improper service and, thereafter, moved to dismiss the complaint on that ground alleging that he did not reside at the subject premises.  Just over two weeks after making the motion, plaintiff “purportedly” served defendant at his residence.  Defendant made another motion to dismiss arguing that a surveillance camera in the lobby of his building contradicted the process server’s affidavit that he gained entry to the building to serve defendant.

Supreme court issued an order dated January 11, 2016, granting defendant’s motion to the extent of scheduling a hearing on the issue of service.  The court also found that defendant’s first motion to dismiss was rendered moot by the second service.  On April 20, 2016, plaintiff moved for extension of time to serve defendant pursuant to CPLR 306-b.  After a hearing, the court determined that defendant was not properly served and that the process server was “totally lacking in credibility” based on the security camera footage.  Nonetheless, the court granted plaintiff’s motion under CPLR 306-b.

On defendant’s appeal, the Second Department found that “the Supreme Court improvidently exercised its discretion in granting the plaintiff’s motion pursuant to CPLR 306-b for leave to extend the time to serve [defendant] with the summons and complaint.”  As to “good cause,” the Court found that plaintiff did not establish that it “exercised diligent efforts in attempting to effect proper service on defendant.”  Plaintiff’s first attempt at service was made at a location that was not defendant’s residence and defendant so stated in his answer and in his first motion to dismiss.  Further, the Court noted that plaintiff waited until the day before the expiration of the 120-day period to attempt to reserve defendant.  However, “in regard to the second attempt at service, which the Supreme Court totally discredited, it cannot be said that the plaintiff exercised reasonable diligence in attempting service.”

The Court, after noting that that 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’” (quoting Leader), found that:

the plaintiff failed to establish entitlement to an extension of time for service in the interest of justice. Even though [plaintiff] was on notice in April 2015—when [defendant] moved to dismiss for the second time based on improper service, relying on the surveillance video recording of the process server—that the February 2015 service was defective, and even though a copy of the video was sent to counsel for [plaintiff] on February 26, 2016, [plaintiff] still waited until April 2016 to move for an extension of time to serve [defendant]. The plaintiff’s motion therefore was not made until one year after [defendant] moved to dismiss, and 16 months after the expiration of the 120-day service period. The facts that the action was timely commenced, that [defendant] had actual notice of the action within the 120-day service period, and that the statute of limitations had expired by the time the plaintiff moved to extend the time to serve, militate in favor of granting the plaintiff’s motion to extend the time to serve. However, these factors are outweighed by the lack of diligence evidenced by the Supreme Court’s finding that the process server never served [defendant], despite the process server’s affidavit claiming he did serve [defendant].

(Citations omitted.)

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