In an action for breach of commercial contract and fraud, the plaintiff moves for an extension of time to complete service on defendants GRENACHE HOLDINGS CORP. and SOUTHBRIDGE RE LLC pursuant to CPLR 306(b): Papers Considered NYSCEF Doc. No. 179-194; 205-209; 210 1. Notice of Motion/Affirmation of Buss, Esq./Exhibits A-N/ 2. Affirmation of Daniel Fix, Esq. in Opposition /Exhibits A-C/ Memorandum of Law in opposition 3. Memorandum of law in reply Factual and Procedural Background Plaintiff commenced this action by filing of the summons and complaint on January 15, 2019. A pre-answer motion to dismiss the complaint was filed, in relevant part, on behalf of defendants GRENACHE HOLDINGS CORP. (“Grenache”) and SOUTHBRIDGE RE LLC (“Southbridge”) on June 4, 2019, which was decided pursuant to a Decision and Order of Hon. Gerald E. Loehr dated December 16, 2019. In said Decision and Order, Judge Loehr directed a traverse hearing be held regarding the service of process on defendants Grenache and Southbridge. A traverse hearing was conducted on August 10, 2021, and this Court issued a Decision and Order, dated September 3, 2021, which dismissed the complaint against defendants Grenache and Southbridge. On August 27, 2021, plaintiffs moved to extend time to serve the summons and complaint on defendants Grenache and Southbridge pursuant to CPLR 306-b. Plaintiffs claim there is no prejudice to defendants because they elected to do business in New York and have moved unsuccessfully to dismiss plaintiffs’ claims on the merits. Plaintiffs claim that extending their time to serve the summons and complaint promotes the interests of justice as the Decision and Order of Judge Loehr dated December 16, 2019 and the Decision and Order of Judge Ecker dated March 11, 2020 have determined that the plaintiffs’ claims have merit, and that denying plaintiffs their day in court would be unjust and prejudicial. Plaintiffs also claim that granting an extension of time to serve the defendants would promote judicial efficiency and economy to have the parties’ rights determined in one proceeding instead of multiple actions arising out of the same facts. Plaintiffs also claim that the Decision and Order of Judge Loehr dated December 16, 2019 permits plaintiff to seek an extension of time to reserve under CPLR 306-b1. In opposition, defendants argue that since this Court dismissed the complaint as against Grenache and Southbridge, plaintiffs’ motion must be denied as there is no longer a viable complaint to be served. Defendants claim that plaintiff’s failure to cross move for an extension of time pursuant to CPLR 306-b when they filed their motion to dismiss in June, 2019 renders the plaintiffs’ motion defective. They also claim plaintiffs’ motion fails to comply with uniform rule 202.8-b(c). Defendants claim that plaintiffs fail to establish good cause or that the interest of justice should allow an extension of time to serve the defendants. Defendants argue that plaintiffs cannot show good cause as plaintiffs failed to make a reasonably diligent effort at service of process on the defendants. Defendants also claim that plaintiffs have not shown they should be permitted an extension of time to serve defendants in the interest of justice as plaintiffs unreasonably waited over two years and until a traverse hearing was held to make the motion to extend their time to serve the defendants. Defendants also claim they will be prejudiced if, after almost three years, plaintiffs were permitted time to serve process, as witnesses’ memories will be challenged and the availability of evidence may be impaired. Discussion “[A] court may consider the merits of a motion pursuant to CPLR 306-b to extend the time for service, even one made after the granting of a motion to dismiss, so long as the action remains pending.” (State of New York Mtge. Agency v. Braun, 182 AD3d 63, 69 [2d Dept 2020]). “[A]n action is deemed pending until there is a final judgment” (id.). In this case, plaintiffs moved to extend time to serve the defendants on August 27, 2021, just prior to this Court’s September 3, 2021 Decision and Order to dismiss the plaintiffs’ complaint against defendants Grenache and Southbridge. In addition, no judgment dismissing the complaint on the ground of lack of personal jurisdiction has yet been entered. As a result, plaintiffs’ motion is timely (id.). Pursuant to CPLR 306-b, where service is not made within 120 days of the commencement of the action, the matter is subject to dismissal, but the court may, “upon good cause shown or in the interest of justice, extend the time for service.” (CPLR 306-b; Leader v. Maroney, 97 NY2d 95, 101 [2001]). The Court of Appeals has made clear that these are two distinct standards and that, while “good cause” requires a showing of reasonable diligence, “the interest of justice” has a broader scope, which can encompass late service due to “mistake, confusion or oversight, so long as there is no prejudice to the defendant” (id. at 105). In determining whether an extension of time is warranted in the interest of justice, a court may consider, inter alia, “diligence, or lack thereof, along with any other relevant 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” (id. at 105-106). “An extension of time for service is a matter within the court’s discretion” (id. at 101). Here, defendants moved to dismiss the complaint against them on June 4, 2019. Despite being made aware of defendants’ contention that they were not properly served, plaintiffs failed to move via cross motion for an extension of time to serve the defendants under CPLR 306-b. Notwithstanding Judge Loehr’s December 16, 2019 Decision and Order suggesting that plaintiffs could seek to serve such motion for an extension of time, plaintiffs failed to do so until August 27, 2021, after the traverse hearing was conducted. The evidence in this case disclosed that, despite plaintiffs hiring a constable in Massachusetts to effectuate service, the constable did not do any independent research or due diligence to determine who could accept service on behalf of the defendant entities or where service could be accepted. The constable testified during the traverse hearing that the individual to whom he handed the papers did not tell him that he was authorized to accept service on behalf of the defendant entities, and the constable did not ask whether the individual was authorized to accept service on behalf of the defendants. Hence, plaintiffs fail to demonstrate that they exercised reasonably diligent efforts to serve process on the defendants, and thus, do not establish “good cause” for granting an extension of time to serve under CPLR 306-b (see generally Moundrakis v. Dellis, 96 AD3d 1026 [2d Dept 2012]). Notwithstanding the above, legislative history indicates that the interest of justice standard is a broader standard designed “to accommodate late service that might be due to mistake, confusion or oversight, so long as there is no prejudice to the defendant” de Vries v. Metro. Transit Auth., 11 AD3d 312, 313 [1st Dept 2004]. “The statute empowers a court faced with the dismissal of a viable claim to consider any factor relevant to the exercise of its discretion. No one factor is determinative — the calculus of the court’s decision is dependent on the competing interests of the litigants and a clearly expressed desire by the Legislature that the interests of justice be served.” (Leader v. Maroney, 97 NY2d at 106.) Here, there is no evidence that the process server made a mistake, but rather he did not make reasonably diligent efforts to serve the defendants. Nonetheless, the action was timely commenced by proper filing and the prior Orders of Judge Loehr and Judge Ecker establish the existence of meritorious claims. Moreover, there is a lack of demonstrable prejudice to the defendants as they were on notice of the claims asserted against them over two (2) years ago2 (Wilson v. City of New York, 118 AD3d 983 [2d Dept 2014]). The defendants’ notice of the claims since 2019 also distinguishes this case from the cases cited by the defendants in support of their position (e.g. Slate v. Schiavone Constr. Co., 4 NY3d 816 [2005] where the Court of Appeals found it was not in the interest of justice to extend plaintiff’s time to serve where plaintiff showed “extreme lack of diligence” and delay of “more than a year and a half after running of the statute of limitations before defendant received any notice of the action”). Thus, upon consideration of all of these factors, the plaintiffs are entitled to an extension of time to serve the summons and complaint under CPLR 306-b in the interest of justice (Leader v. Maroney, 97 NY2d 95 [2001]). Accordingly, it is hereby ORDERED that the plaintiffs’ motion to extend time to serve the complaint is GRANTED; and it is further ORDERED that the plaintiffs shall serve the defendants within 30 days of the date of this order. The defendants shall serve their answer pursuant to the provision of the CPLR. The parties are directed to appear in the Preliminary Conference Part on a date and time to be provided. Dated: September 17, 2021
