| JPMorgan Chase Bank, N.A. v Lilker |
| 2017 NY Slip Op 06434 [153 AD3d 1243] |
| September 13, 2017 |
| Appellate Division, Second Department |
[*1]
| JPMorgan Chase Bank, National Association,Respondent, v Molly I. Lilker, Also Known as Molly Lilker, et al.,Appellants. |
Jonathan A. Stein, P.C., Cedarhurst, NY, for appellants.
Stern & Eisenberg, P.C., Depew, NY (Margaret J. Cascino of counsel), forrespondent.
Appeal from an order of the Supreme Court, Nassau County (Thomas A. Adams, J.), enteredSeptember 9, 2015. The order denied the defendants' motion pursuant to CPLR 5015 (a) and 317to vacate a judgment of foreclosure and sale of that court entered December 23, 2014, upon theirfailure to answer the complaint or appear at the inquest, and pursuant to CPLR 3211 (a) todismiss the complaint for lack of personal jurisdiction. By decision and order on motion datedFebruary 5, 2016, this Court granted the defendants' motion to stay enforcement of the judgmentof foreclosure and sale, including the foreclosure sale of the premises, pending determination ofthe appeal.
Ordered that the order is reversed, on the law, with costs, and the matter is remitted to theSupreme Court, Nassau County, for a hearing on the issue of whether the plaintiff's counsel hadknowledge that the defendants could not properly be served on a Saturday, and a newdetermination thereafter of the defendants' motion pursuant to CPLR 5015 (a) and 317 to vacatethe judgment of foreclosure and sale, and pursuant to CPLR 3211 (a) to dismiss the complaint,and for the issuance of an order staying enforcement of the judgment of foreclosure and salepending the hearing and determination of the defendants' motion.
The plaintiff commenced this action to foreclose a consolidated mortgage on the defendants'residential real property in Lawrence. According to the affidavits of service, after fourunsuccessful attempts at personal service, the process server served the defendants by "nail andmail" service pursuant to CPLR 308 (4). The affixation portion of the service was accomplishedon the afternoon of Saturday, October 19, 2013, when the process server affixed two copies ofthe summons, complaint, and related documents to the door of the subject premises. Thedefendants did not answer the complaint. Their counsel appeared for a settlement conference, butneither the defendants nor their counsel appeared at the adjourned conference or at thesubsequent inquest. Following the inquest, a judgment of foreclosure and sale was entered onDecember 23, 2014.
The defendants moved pursuant to CPLR 5015 (a) to vacate the judgment of foreclosure andsale, and thereupon pursuant to CPLR 3211 (a) to dismiss the complaint. They argued that theSupreme Court lacked personal jurisdiction over them because service of process was effectuatedin violation of General Business Law § 13, since, despite knowledge by theplaintiff's counsel that they are observant, Orthodox Jewish persons who adhere to the Sabbath,the affixation [*2]portion of the "nail and mail" service wasimproperly effectuated on a Saturday. The defendants further asserted that the plaintiff failed tocomply with the notice requirements of the consolidated note and of RPAPL 1304. The courtdenied the defendants' motion. The defendants appeal.
General Business Law § 13 provides: "Whoever maliciously procures anyprocess in a civil action to be served on Saturday, upon any person who keeps Saturday as holytime, and does not labor on that day, or serves upon him any process returnable on that day, ormaliciously procures any civil action to which such person is a party to be adjourned to that dayfor trial, is guilty of a misdemeanor."
The defendants contend that the plaintiff's counsel was aware that they are observant,Orthodox Jewish persons who adhere to the Sabbath, and thus, the Saturday affixation of processto the door of their residence was invalid. This appears to be an issue of first impression for thisCourt. We agree with the other courts that have addressed the issue, which have consistentlyheld, for more than a century, that service in violation of General Business Law§ 13, or its predecessor statute, is void, and personal jurisdiction is not obtainedover the party served (see Martin v Goldstein, 20 App Div 203, 205 [1897]; Tenenbaum v Setton, 49 Misc 3d39, 41 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; Chase ManhattanBank [USA] N.A. v Schneider, NYLJ, Oct. 3, 1988, 1988 NY Misc LEXIS 896 [App Term,2d Dept, 9th & 10th Jud Dists 1988]; City Natl. Bank, N.A. v Lake St. 1, LLC, 38Misc 3d 1224[A], 2013 NY Slip Op 50244[U] [Sup Ct, Orange County 2013]; Garner vDoggie Love L.L.C., 2011 NY Slip Op 30072[U] [Sup Ct, Queens County 2011]; FPTK, LLC v Paradise Pillows, Inc., 9Misc 3d 1125[A], 2005 NY Slip Op 51790[U] [Civ Ct, Kings County 2005]; Hirsch vBen Zvi, 184 Misc 2d 946, 947 [Civ Ct, Kings County 2000]; Jewish Ctr. of Baldwin vWiner, 216 NYS2d 153 [Sup Ct, Nassau County 1961]; but see Matter of Kushner,200 AD2d 1, 2 [1994] [assuming but not deciding the issue]; see generally McKinney'sCons Laws of NY, Book 1, Statutes § 75; Matter of Trosk v Cohen, 262 NY430, 435-436 [1933]). Moreover, we hold that the statute applies not only to personal serviceupon a defendant, but also to the affixation portion of "nail and mail" service pursuant to CPLR308 (4) on the door of a defendant's residence, as occurred here (see Garner v Doggie LoveL.L.C., 2011 NY Slip Op 30072[U] [2011]; cf. FPTK, LLC v Paradise Pillows, Inc., 9 Misc 3d 1125[A], 2005NY Slip Op 51790[U] [2005]).
To establish a violation of General Business Law § 13, malicious intent must beshown (see Martin v Goldstein, 20 App Div at 205; Chase Manhattan Bank [USA]N.A. v Schneider, 1988 NY Misc LEXIS 896). "Service on the Sabbath . . .with knowledge that the person to be served observes the Sabbath . . . constitutesmalice" (Hirsch v Ben Zvi, 184 Misc 2d at 948; see HSBC Mtge. Corp. [USA] vMyers, Sup Ct, Nassau County, McCabe, J., index No. 013868/07; FPTK, LLC v Paradise Pillows, Inc., 9Misc 3d 1125[A], 2005 NY Slip Op 51790[U] [2005]). The knowledge of a plaintiff or itscounsel is imputed to the process server by virtue of the agency relationship (see HSBC Mtge.Corp. [USA] v Myers, Sup Ct, Nassau County, McCabe, J., index No. 013868/07; FPTK, LLC v Paradise Pillows, Inc., 9Misc 3d 1125[A], 2005 NY Slip Op 51790[U] [2005]; Hirsch v Ben Zvi, 184 Misc2d at 948).
In support of their motion, the defendants submitted an August 26, 2013, letter from theircounsel which advised the plaintiff's counsel's law firm that the defendants are "observant,Orthodox Jews," who cannot be served on a Saturday, together with a fax transmission reportindicating a successful transmission. This proof was sufficient to establish, prima facie, that theplaintiff's counsel had knowledge that the defendants were protected from Saturday service byGeneral Business Law § 13 (see HSBC Mtge. Corp. [USA] v Myers, SupCt, Nassau County, McCabe, J., index No. 013868/07; cf. Matter of Kushner, 200 AD2dat 2; Jaffe Ross & Light, LLP v Mann, 39 Misc 3d 1231[A], 2013 NY Slip Op50825[U] [Sup Ct, NY County 2013], superseded on rearg of other issues 2013 NY SlipOp 32212 [2013], revd on other grounds 121 AD3d 480 [2014]). However, in opposition,the plaintiff submitted a denial by its counsel of receipt of the faxed letter, and an affidavit by thelaw firm's independent information technology contractor to the effect that there was noindication of receipt in the firm's archive system. These submissions raised a question of fact asto whether the plaintiff's counsel had knowledge that the defendants could not properly be servedon a Saturday, necessitating a hearing (see Wachovia Bank, N.A. v Greenberg, 138 AD3d 984, 985[2016]; Chase Manhattan Bank [USA] N.A. v Schneider, 1988 NY Misc LEXIS 896,*1).
[*3] The defendants' further contention that thejudgment of foreclosure and sale should be vacated pursuant to CPLR 5015 (a) (4) based on theplaintiff's failure to satisfy the notice requirements of the note or of RPAPL 1304 is withoutmerit. Any such failure would go to the merits of the dispute, and not the court's subject matterjurisdiction which is the basis for a CPLR 5015 (a) (4) dismissal (see TD Bank, N.A. v Mandia, 133AD3d 590, 591 [2015]; AuroraLoan Servs., LLC v Weisblum, 85 AD3d 95, 106 [2011]; see generally Lacks vLacks, 41 NY2d 71, 74-75 [1976]). The defendants failed to rely on CPLR 5015 (a) (1) ontheir motion to vacate the judgment of foreclosure and sale and, in any event, failed todemonstrate a reasonable excuse for their default (see Perellie v Crimson's Rest., 108AD2d 903, 904 [1985]).
Accordingly, we reverse the order and remit the matter to the Supreme Court, NassauCounty, for a hearing to determine whether the plaintiff's counsel had knowledge that thedefendants could not properly be served on a Saturday, such that service of process upon thedefendants was invalid, and for a new determination thereafter of the defendants' motionpursuant to CPLR 5015 (a) and 317 to vacate the judgment of foreclosure and sale, and pursuantto CPLR 3211 (a) to dismiss the complaint. Rivera, J.P., Leventhal, Austin and Christopher, JJ.,concur.