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SERVICE AND VENUE PROVISIONS IN CONTRACT WITH A LIMITED LIABILITY COMPANY DID NOT APPLY TO DEFENDANT INDIVIDUALLY, DEFECTS IN SERVICE PROPERLY OVERLOOKED PURSUANT TO CPLR 2001 (THIRD DEPT).

The Third Department determined plaintiffs’ service of process on defendant was flawed but Supreme Court properly overlooked the defects under CPLR 2001. The Third Department further held that the defendant’s motion to change venue should have been granted. Both the method of service (mail) and venue were based on provisions in a purchase and sale contract. However, the purchase and sale agreement was with a limited liability company, but the confessions of judgment upon which the suit were based were signed by defendant in her personal capacity, not as the sole member of the LLC. Therefore the service and venue contract provisions did not apply:

Defendant and the limited liability companies of which she is a member “are distinct entities,” however, and the former is not individually bound by the contractual commitments of the latter… . Nothing in the purchase and sale agreement binds defendant to its terms, instead making clear that no “shareholder, director, officer of or principal or agent of” [the LLC] will “have any personal liability, directly or indirectly, under or in connection with” either the agreement or any amendments to it. …

Due to the inapplicability of those contractual provisions, plaintiffs’ effort to serve defendant by mail was deficient in that service “under CPLR 3213 is subject to the rules governing service of the summons generally” … . The mailing nevertheless placed defendant on notice of the pending motion for summary judgment in lieu of complaint, and she responded with a cross motion that opposed the motion on various grounds. Plaintiffs then arranged for proper, albeit untimely, service of defendant pursuant to CPLR 308 (2), and advised that they were amenable to any further adjournment of the return date “as defendant and [Supreme] Court may find proper.”… Accordingly, while a wholesale failure to timely serve defendant with the initiatory papers constitutes “a fatal jurisdictional defect”… , defendant was placed on notice, then submitted a cross motion that raised various objections and included substantive opposition before being properly served. In light of these peculiar circumstances, as well as the absence of any prejudice flowing from plaintiffs’ missteps, we are persuaded that the untimeliness of the proper service could be and rightly was overlooked (seeCPLR 2001, 2004 …). Capolino v Goren, 2017 NY Slip Op 08246, Third Dept 11-22-17

CIVIL PROCEDURE (SERVICE AND VENUE PROVISIONS IN CONTRACT WITH A LIMITED LIABILITY COMPANY DID NOT APPLY TO DEFENDANT INDIVIDUALLY, DEFECTS IN SERVICE PROPERLY OVERLOOKED PURSUANT TO CPLR 2001 (THIRD DEPT))/LIMITED LIABILITY COMPANY (SERVICE AND VENUE PROVISIONS IN CONTRACT WITH A LIMITED LIABILITY COMPANY DID NOT APPLY TO DEFENDANT INDIVIDUALLY, DEFECTS IN SERVICE PROPERLY OVERLOOKED PURSUANT TO CPLR 2001 (THIRD DEPT))/CONTRACT LAW (SERVICE AND VENUE PROVISIONS IN CONTRACT WITH A LIMITED LIABILITY COMPANY DID NOT APPLY TO DEFENDANT INDIVIDUALLY, DEFECTS IN SERVICE PROPERLY OVERLOOKED PURSUANT TO CPLR 2001 (THIRD DEPT))/CPLR 2001 (SERVICE AND VENUE PROVISIONS IN CONTRACT WITH A LIMITED LIABILITY COMPANY DID NOT APPLY TO DEFENDANT INDIVIDUALLY, DEFECTS IN SERVICE PROPERLY OVERLOOKED PURSUANT TO CPLR 2001 (THIRD DEPT))

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