This was originally published on the SGR Blog.
Court Determines If Misinformation Sufficed to Establish Usual Place of Abode
An intermediate appellate court was recently presented with a simple question that had not previously arisen: whether an affirmative misrepresentation by a relative of a defendant at a residential address that the address was proper, which was relied upon by a process server, may establish that service was valid–even if evidence established that the address was not, in fact, the defendant’s actual dwelling place or usual place of abode? Or, under the circumstances, was service of process upon the defendant at an address that was not actually his dwelling place or usual place of abode defective, notwithstanding information provided to the process server at the doorstep?
A mortgage foreclosure action arose out of an alleged default on a note executed in November 2004 by James A. Kelly and his father-in-law, Edward J. Bressler, in favor of Everbank. As security for the note, they executed a mortgage encumbering certain real property in Mastic Beach. The mortgage documents included an occupancy rider in which Bressler expressed his intention to primarily reside at the mortgaged premises within 60 days.
In August 2013, Everbank filed suit alleging a default in payment obligations beginning in November 2012 and continuing thereafter. Nonparty Thomas Burke, who was working for Integrity Real Property Services, was assigned to serve process in the action. On August 22, 2013, Burke served both Kelly and Bressler at the Mastic Beach property by the suitable age and discretion method of CPLR 308(2), by hand delivering copies of the summons and complaint to a woman identified as Crystal Kelly. Burke’s affidavit of service for Bressler stated that the person who accepted the papers was “Crystal Kelly, DAUGHTER, who verified that the intended recipient actually resides at this location.” A second affidavit of service stated that the summons and complaint was mailed to Bressler at the property on August 26, 2013.
Kelly and Bressler failed to appear in the action or interpose an answer. On April 16, 2015, the Supreme Court issued an order of reference. On December 18, 2015, Everbank moved to confirm the referee’s report and for a judgment of foreclosure and sale.
In March 2016, Bressler moved to vacate the order of reference and to dismiss the complaint insofar as asserted against him, on the ground that he did not live at the property and that service of process upon him at that location was void and improper. More specifically, Bressler stated in his affidavit in support of the motion that he had resided for nearly 40 years in Center Moriches and never used the Mastic Beach property as his dwelling place or usual place of abode. Bressler explained that he co-signed the mortgage documents with Kelly, his son-in-law, merely to assist him in obtaining the loan. Besler attached copies of his driver license; tax, cable, and electric bills; an automobile insurance renewal notice; and his voter registration information to corroborate his claim that he resided in Center Moriches. Besler’s daughter, Crystal Kelly, also submitted an affidavit in support of the motion, stating that the process server delivered three sets of papers and asked for her name, but did not ask her any further questions. Crystal Kelly stated in the affidavit that her father did not reside at the property, and she denied ever telling the process server that her father resided there.
In an order dated December 15, 2016, the Supreme Court held both Everbank’s motion and Bressler’s motion in abeyance, pending a hearing to determine the validity of service of process upon Bressler. At the hearing conducted on September 14, 2017, Burke testified to facts surrounding service of process on Bressler, relying in large measure upon his affidavits of service. Burke testified that he had a conversation with Crystal Kelly at the time of service when, in response to his inquiry, Crystal Kelly identified Kelly as her husband and Bressler as her father, and that each resided at the property.
Bressler testified at the hearing that he never lived at the property, as he had lived, since 1975, with his wife at premises in Center Moriches. Bressler supported his testimony with documents admitted into evidence consisting of his driver license with a 2010 issue date and a Center Moriches property, and a certified copy of the deed for the Center Moriches address. Crystal Kelly, who was present for the entirety of the hearing, did not take the stand to testify.
In an order dated December 18, 2017, Supreme Court granted Everbank’s motion to confirm the referee’s report and for a judgment of foreclosure and sale, and denied those branches of Bressler’s motion which were to vacate the order of reference and dismiss the complaint insofar as asserted against him for lack of personal jurisdiction. The Court found Burke’s testimony credible, that Crystal Kelly had stated to him that the recipients of process resided at the property. The Court drew a discretionary negative inference against Bressler from the failure of Crystal Kelly to testify, despite the fact that she was present at the hearing. The Court also found that Burke acted reasonably in relying upon the representations of Crystal Kelly that Bressler resided at the property. Bressler appealed.
On December 18, 2017, the Court issued an order and judgment of foreclosure and sale, confirming the referee’s report and directing the sale of the property. Bressler appealed from that order and judgment.
A court lacks personal jurisdiction over a defendant who is not properly served with process. When it is determined that process was ineffective, all subsequent proceedings are rendered null and void as to that party. Further, service of process upon a natural person must be made in strict compliance with the methods of service set forth in CPLR 308. Service of process under CPLR 308(2), at issue here, required that the summons be delivered within the state to a person of suitable age and discretion at the defendant’s “actual place of business, dwelling place or usual place of abode,” along with a mailing of the summons to the defendant’s last known residence or actual place of business. Personal jurisdiction is not acquired absent compliance with both the delivery and mailing requirements of the statute.
At a hearing to determine the validity of service, the burden of proof is on the party asserting the existence of personal jurisdiction. Credibility determinations rendered by Supreme Court as to the witnesses who have testified are entitled to great deference on appeal.
Here, Burke, the process server, testified that Bressler’s daughter, Crystal Kelly, stated at the time of service that Bressler lived at the property. Burke’s testimony was consistent with the affidavit of service he had prepared and executed at that time.
On appeal, Bressler argued that personal jurisdiction was never acquired over him, as the property was, in fact, not actually his dwelling place or usual place of abode. Indeed, Bressler presented significant evidence in support of his motion and at the hearing that he resided not at the subject property in Mastic Beach, but at another location in Center Moriches. Bressler’s motion was supported by several pieces of documentary evidence reflecting that his residence was located in Center Moriches. Those documents included his driver license containing the Center Moriches address which was issued on a date that preceded the service of process, bills for tax, cable, and electric expenses, an automobile insurance renewal notice, and his voter registration information. Bressler testified at the hearing about his 40-year residency at his Center Moriches address, as corroborated by his driver license and a deed to that property. While any one piece of evidence, standing alone, might not establish that Bressler lived in Center Moriches at the time of service, the evidence possessed by the Supreme Court, viewed collectively, established that Bressler did not live at the Mastic Beach property where service of process pursuant to CPLR 308(2) was effectuated.
The question raised by the appeal was whether Crystal Kelly’s representation to the process server that her father lived at the service address might override the greater quantum of evidence that he did not, in fact, live there. In other words, may a process server reasonably rely upon the representations of a family member at the service address, that the defendant actually dwells at that address, for service of process to be effectuated there? While the Supreme Court held that there can be such reasonable reliance for service of process to be effective, so as to implicitly excuse service at an incorrect address, the appeals court concluded that a representation, or misrepresentation, of a family member does not override the plain language of CPLR 308(2) that service be made at the defendant’s actual “dwelling place or usual place of abode.”
Process servers need not exercise due diligence to locate the defendant for personal delivery of the summons prior to effective service pursuant to CPLR 308(2), as service under that provision constitutes personal service. Service may be made upon a person of suitable age and discretion at a defendant’s actual place of business, dwelling place, or usual place of abode, with the requisite additional mailing, even upon the first attempt at service. In that respect, CPLR 308(2) is different from other methods of substituted service such as the “affix and mail” procedure of CPLR 308(4), where due diligence must be undertaken to serve the defendant under either CPLR 308(1) or (2) before resorting to that alternate method. However, even the convenience of CPLR 308(2), without the need for the process server to first undertake due diligence to locate the defendant, presupposes that the service address meets the requirements of the statute—that it be the actual place of business, dwelling place, or usual place of abode of the party to be served.
The recognized exceptions to following the precise language of CPLR 308 are few and far between. One exception is the concept of apparent authority when a recipient of process represents that he or she is authorized to accept service on behalf of an entity, when in fact such authority is lacking. Under those circumstances, service at a proper location, where the process server relies upon the apparent authority of the recipient to accept service, has been upheld. Another exception involves estoppel, precluding a defendant from challenging the location and propriety of service of process if that defendant engaged in affirmative conduct which misleads a party into serving process at an incorrect address. That exception is seen, for instance, when a defendant at an accident scene provides a driver license containing a former address, and service of process is then effected at the former address. And when a process server relies on Department of Motor Vehicles records which are inaccurate because the defendant failed to fulfill the statutory obligation of timely notifying DMV of a change of address, the defendant is estopped from raising a claim of defective service at the stale address. Yet another exception, inapplicable here, exists for circumstances where the defendant resists service under CPLR 308(1) and (2). Under such circumstances, the summons may be left in the general vicinity of the defendant without an actual hand-to-hand delivery to the recipient.
For a defendant to be estopped from raising a claim of defective service, the conduct misleading the process server must be the defendant’s conduct, as distinguished from conduct of a third party.
Here, Crystal Kelly did not misrepresent “who” could accept service of process in the sense of an apparent authority exception to CPLR 308. Crediting Burke’s hearing testimony, as did the Supreme Court, Crystal Kelly instead made a representation, or perhaps a misrepresentation, about “where” Bressler resided, which was then relied upon by the process server. Estoppel does not bar Bressler from arguing that he lived at an address other than the property, as the statement relied upon by the process server about where he lived was not uttered by him but by a third person.
Since the other evidence in the record credibly established that Bressler did not in fact live at the property, the statement by Crystal Kelly that Bressler lived there was not sufficient to support a finding that it was Bressler’s dwelling place or usual place of abode. In other words, an acceptance of service by a person of suitable age and discretion is invalid if the service address is not, in fact, the defendant’s actual place of business, dwelling place, or usual place of abode. That is exactly what occurred here. The process server must perform a proper inquiry to determine the defendant’s actual place of business, dwelling place, or usual place of abode, which under CPLR 308 must be correct absent very limited exceptions not applicable here. In this case, there was a dispositive distinction between what Crystal Kelly said at the time of the service from what Bressler’s dwelling place apparently was in fact.
Further, Burke’s belief that he was effecting service at a proper address, however reasonable it might have been based on what was told to him by Crystal Kelly, was not relevant to whether the service was at a qualifying location under CPLR 308(2). A mere statement by the person of suitable age and discretion that a defendant lives or works at the service address does not transform an improper service address into a proper one, given how exacting the Legislature has prescribed the methods of service and the need for courts and litigants to have certainty and reliability in how the law is applied in order to avoid generating collateral disputes over those matters. A misrepresentation about one’s authority to accept service may sometimes be relied upon to establish proper service based on apparent authority, but a misrepresentation as to place cannot be so relied upon—unless the defendant is the party engaging in the misleading conduct so as to trigger an estoppel.
The occupancy rider executed by Bressler contractually authorized a sale of the mortgaged premises or financial adjustments to the note in the event Bressler were to reside elsewhere. Moreover, the occupancy rider merely conveyed Bressler’s “inten[t]” to live at the subject property within 60 days of his execution of the mortgage documents. A statement of future intent was not tantamount to proof of actually dwelling at the subject property, as intent may be changed and as the occupancy rider envisioned adjustments to the note in the event Bressler were to live elsewhere. And the provision of the note, which directed that notices be sent to the mortgaged premises by first-class mail, pertains to ministerial “notices… provided for in this Security Instrument,” which was not a contractual opt-out of the service of process rules of CPLR 308.
Burke’s credible testimony established Everbank’s prima facie burden of proving that process was properly served. But Bressler’s evidence established that process was not effectuated at a location authorized by CPLR 308(2). Any statements uttered by Crystal Kelly that Bressler lived at the property did not fit into any recognized exception to the requirements of CPLR 308(2) that service be effected at a defendant’s actual place of business, dwelling place, or usual place of abode. The order and judgment of foreclosure and sale was reversed and Bressler’s motion to dismiss the complaint insofar as asserted against him for lack of personal jurisdiction was granted.