OPINION OF THE COURT
In these consolidated proceedings, defendant Worthington Cylinders Corporation (hereinafter Worthington) moves by order to show cause for an order dismissing the complaint of plaintiffs Russell Breer and Shirley Breer, as well as the cross claims of defendants Sears, Roebuck and Co., Imperia Bros., Inc., LPG Fuels, Inc., and the cross claims of Andrew Rogers, Administrator of the Estate of Catherine Day, on the ground that personal jurisdiction over the moving defendant was not acquired.
Issues Presented
In a case of first impression under the CPLR, this court is presented with the issue whether personal service on a foreign corporation, which is not authorized to do business in New York, may be accomplished by service upon the Secretary of State of the foreign jurisdiction. In addition, the court must consider whether that unauthorized foreign corporation has
Background
On July 28, 1990, the decedent Catherine Day requested the assistance of her neighbor, Russell Breer, in attaching a propane tank to her barbecue grill, which the decedent had located on a screened-in porch attached to her private dwelling. The tank had been manufactured by defendant Worthington. While attempting to connect the tank to the grill, an explosion and fire occurred, injuring Breer and killing Catherine Day. Ms. Day’s daughter, plaintiff Theresa Day, who ran to assist her mother, suffered psychological injury. The Day plaintiffs commenced an action for wrongful death and personal injury, and Breer and his wife, who sues derivatively, commenced an action for personal injury (the Breer action). These actions, as well as a third action seeking damages for property damage, were consolidated for joint trial in an order dated December 1, 1994.
Procedural History
On the eve of trial, defendant Worthington, a corporation incorporated in the State of Ohio, made the instant motion to dismiss, contending that it had not been properly served with process, and that consequently, jurisdiction had not been obtained against it in the Breer action. Defendant Worthington, a foreign corporation not authorized to do business in New York, does not deny that it is subject to the long-arm jurisdiction of the courts of this State pursuant to CPLR 302. Worthington claims, however, that service upon it, as an unauthorized foreign corporation, had to be made in compliance with Business Corporation Law § 307. Worthington further argues that plaintiffs failed to effectuate service in compliance with that section, and in particular, had failed to file an affidavit of compliance, or, indeed, proof of service of any kind, as required by the provisions of Business Corporation Law § 307 (c). The defect, defendant maintains, constitutes an incurable jurisdictional impediment to the maintenance of the Breer action.
Plaintiff Breers’ counsel claims that he initially attempted to serve defendant Worthington on or about May 11, 1992, via service on the Secretary of State of New York, and by ordinary mail to a person identified as Worthington’s agent for the acceptance of service in Ohio. A slip which ostensibly accompanied the complaint when it was served on the Secretary
Subsequent to the rejection by the Secretary of State of New York, plaintiff Breers’ counsel contacted the Secretary of State of Ohio, and was advised that service could be effected through that office pursuant to Ohio Revised Code Annotated § 1701.07 (H). That Code provision states, in pertinent part: “(H) Any process, notice, or demand required or permitted by statute to be served upon a corporation may be served upon the corporation by delivering a copy of it to its agent * * * If * * * (3) the corporation has failed to maintain an agent as required by this section, and if in any such case the party desiring that the process, notice, or demand be served * * * shall have filed with the secretary of state an affidavit stating that one of the foregoing conditions exists and stating the most recent address of the corporation that the party after diligent search has been able to ascertain, then service of process, notice, or demand upon the secretary of state, as the agent of the corporation, may be initiated by delivering to the secretary of state * * * quadruplicate copies of such process, notice, or demand and by paying to the secretary of state a fee of five dollars. The secretary of state shall forthwith give notice of the delivery to the corporation at its principal office * * * and shall forward to the corporation at said addresses, by certified mail, with request for return receipt, a copy of the process, notice, or demand; and thereupon service upon the corporation shall be deemed to have been made.” (Emphasis added.)
The record does not disclose whether Worthington failed to maintain an agent for service of process as required by Ohio law. It is noted that plaintiff stated that process was mailed to a person identified as Worthington’s agent for the acceptance of service in Ohio, suggesting, but by no means establishing, that Worthington did indeed comply with that component of Ohio’s statutory scheme for service on its domestic corporations. Subsequently, the requisite fee and the papers were dispatched by plaintiff to the Ohio Secretary of State, who served Worthington pursuant to Ohio Revised Code Annotated § 1701.07 (H). When service was effected, the Ohio Secretary of State returned a document entitled proof of service. The “proof of service” mailed by the Secretary of State of Ohio indicates that the Secretary of State served Worthington by certified
Plaintiff Breers maintain, in the alternative, that irrespective of the invalidity of all of the attempts at service, defendant Worthington has waived its jurisdictional defense by reason of its failure to comply with CPLR 3211 (e), which, effective January 1, 1997, requires that a motion to dismiss be made within 60 days after the service of a pleading asserting a defense based on lack of personal jurisdiction.
In its answer dated June 12, 1992, defendant Worthington asserted a defense of lack of personal jurisdiction, and now argues, inter alia, that assuming arguendo that CPLR 3211 (e) applies, the 1997 amendment should not be applied retroactively, and that, in any event, the failure to properly serve Worthington constituted an “incurable” jurisdictional impediment.
Discussion
Service Pursuant to Business Corporation Law §§ 306 and 307
When a foreign corporation has been authorized to conduct business in New York, Business Corporation Law § 306 permits service on the foreign corporation via service upon the Secretary of State of New York. In the case under consideration, defendant Worthington was not authorized to conduct business in the State of New York, and thus plaintiffs’ attempt to serve said defendant pursuant to Business Corporation Law § 306 was clearly invalid.
Section 307 of the Business Corporation Law deals with service upon unauthorized foreign corporations. Although service is initially made on the New York Secretary of State, as is the case under Business Corporation Law § 306, it has been held that in order to satisfy due process requirements, in addition to service on the Secretary of State, compliance with all of the additional section 307 provisions is required. (Flick v Stewart-Warner Corp.,
The manner of service attempted by plaintiffs here clearly cannot be sustained under Business Corporation Law § 307. Indeed, the facts indicate that it is unlikely that plaintiffs were aware of the provisions of Business Corporation Law § 307. The slip accompanying the process delivered to the Secretary of State of the State of New York made reference to Business Corporation Law § 306. Among the myriad deficiencies in service under section 307 are the rejection of process by the Secretary of State; the fact that service was effectuated by certified mail, and not registered mail, as provided in Business Corporation Law § 307 (b) (2); and the failure to file either the return receipt signed by the foreign corporation or other official proof of delivery pursuant to Business Corporation Law § 307 (c) (2). Moreover, in view of the holding in Flannery v General Motors Corp. (
Accordingly, service under Business Corporation Law § 307 must be found insufficient. However, by its terms, Business Corporation Law § 307 does not purport to establish an exclusive mechanism for service on unauthorized, foreign corporations. (Business Corporation Law § 307 [e]; Van Wert v Black & Decker,
Service in Accordance With CPLR Article 3
At the time this action was commenced, CPLR 311 (a) (1) provided that personal service on a foreign corporation may be
Clearly, therefore, while a defendant subject to the long-arm jurisdiction of the court may be served outside of New York State, that service must be made in the foreign jurisdiction in a manner consistent with the manner of service authorized under the laws of the State of New York. As noted by Joseph M. McLaughlin in his Practice Commentaries to CPLR 313, “When service is authorized to be made outside New York, it must be made in the foreign state or country as though that foreign state or country were New York.” (McKinney’s Cons Laws of NY, Book 7B, CPLR C313:2, at 427 [1990].)
The relevant question is, then, whether service on the Ohio Secretary of State constitutes service on defendant Worthington in a manner consistent with New York law. The answer depends upon two separate inquiries: first, whether the Secretary of State of Ohio was designated by Worthington as an agent for the service of process by actual designation, or by operation of Ohio law; and second, if the Ohio Secretary of State was a duly authorized agent, was the Ohio Secretary of State served in a manner consistent with New York law. Only after the first issue is resolved should the court examine the method of delivery which was actually employed to give notice to that agent. For the reasons which follow, this court holds that the Secretary of State of Ohio was not an agent for the service of process, and it is consequently not necessary to examine the type of service employed.
It must be noted that the Ohio Code provides a predicate to the appointment of the Secretary of State as an agent for service of process; and that the Code does not provide that service may be made in the first instance on the Ohio Secretary of State. Rather, as is clear from the language of the statute, some attempt at service on the corporation’s statutory agent
The statutory predicate triggering the effectiveness of the designation by law of the Ohio Secretary of State cannot be assumed, on a silent record, from the fact that the Ohio Secretary of State in fact accepted service of process. Indeed, plaintiff himself purported to have served, by mail, process on a person identified, without elaboration, as the defendant’s designated agent for service in Ohio. It cannot be assumed that no individual was registered as an agent for the service of process in Ohio. Absent proof that the corporation had failed to maintain a designated agent, the Secretary of State of Ohio does not become an agent appointed by law for the service of process. Therefore, in the case before the court, since there was no showing that the statutory predicate was met, service on the Ohio Secretary of State is a nullity, and is insufficient to confer personal jurisdiction over defendant Worthington.
Similar, but not identical, issues were presented in Howard Converters v French Art Mills (
In Howard Converters (supra), service was made on defendant, a New Jersey corporation, in New Jersey pursuant to former New York Civil Practice Act § 235, via service, not on the Secretary of State of New Jersey, but on an individual (Filbert L. Rosenstein) who was actually designated as an agent in New Jersey for the service of process, pursuant to the New Jersey Corporation Act. The New Jersey Corporation Act required corporations transacting business in New Jersey to designate an agent for the service of process. That case arose prior to the enactment of New York’s CPLR long-arm statute (see, L 1962, ch 308), and it concerned in rem jurisdiction over property located in New York, which could be effected, pursuant to former Civil Practice Act § 235, by service of process “ ‘upon a defendant without the state in the same manner as if such service were made within the state.’ ” (Supra, at 241.) The New York Court of Appeals observed that this section must be read as requiring service in the same manner as ser
Expanding on the reasoning of Howard Converters (supra), the Federal Second Circuit Court of Appeals has held that, under New York law, service on the Secretary of State of New Jersey, appointed as an agent of a New Jersey corporation pursuant to the laws of New Jersey, suffices to confer jurisdiction on the foreign corporation'in New York. (Meyer v Indian Hill Farm, 258 F2d 287 [2d Cir 1958], supra.) The Meyer court reasoned that service on a foreign corporation could be effected within New York pursuant to former Civil Practice Act § 229 by service on a “ ‘person or public officer designated for the purpose pursuant to law by certificate filed in the department of state.’ ” A public officer designated as an agent for service pursuant to law was construed to include a public officer appointed under New Jersey law.
In Simon (supra), service of process on a Delaware corporation was attempted by service on the Delaware Secretary of State. However, the manner of service adopted by the plaintiff was held not sufficient to establish jurisdiction under New York law because of a variance between the statutes in New York and in Delaware which implement and permit service on a Secretary of State. The court in that action observed: “CPLR § 313, which governs the mode of service in cases in which the jurisdiction of the New York courts rests on the long arm stat
This court is not persuaded that the reasoning of Simon (supra) is sound, because in this court’s view the proper inquiry is not the similarity of the respective statutory schemes for service on the Secretary of State, but rather whether the Delaware Secretary of State constituted a duly authorized agent for the service of process, and whether service on him was effectuated in a manner consistent with New York law. In Simon, there was a failure to comply with the “due diligence” contingency upon which the designation of the Delaware Secretary of State as an agent for service was founded. Although recognizing that there was a failure to comply with this contingency, the Simon court did not base its decision upon this defect, but rather focused its concern on the differences between the Delaware and New York statutory schemes for service on the Secretary of State. The primary consideration should have been whether there was an effective designation of the foreign Secretary of State as an agent for the service of process. In Delaware, the Secretary of State is only authorized to accept service of process if, in the first instance, after due diligence, a corporate officer or other registered agent cannot be served. Once the contingency has been fulfilled, the designation of the Secretary of State is complete, and part one of the two-part predicate is satisfied. Only after that first threshold is passed, and it is established that the foreign Secretary of State is “[an] agent authorized * * * by law to receive service” (CPLR
In any event, a proper construction of CPLR 311 and 313 makes it plain that an agent designated “by appointment or by law” in the foreign jurisdiction, including a foreign Secretary of State, is authorized to receive service provided that service is accomplished in the same manner as service within New York State. Lastly, as the manner of service on defendant Worthington in Ohio was defective, the court must consider whether said defendant has waived the defense of lack of jurisdiction.
The Effect of Failure to Move to Dismiss Pursuant to CPLR 3211 (e)
CPLR 3211 (e), as amended, provides that “an objection that the summons and complaint * * * was not properly served, is waived if, having raised such an objection in a pleading, the objecting party does not move for judgment on that ground within sixty days after serving the pleading, unless the court extends the time upon the ground of undue hardship.” (See, L 1996, ch 501, § 1; eff Jan. 1, 1997.) The statute clearly applies to actions pending on the effective date of the statute so as to require that the motion be brought within 60 days of the effective date of the statute (i.e., on or before March 3, 1997). (Fleet Bank v Riese,
Defendant Worthington nevertheless argues that the failure to properly effectuate service in this instance is incurable, relying on those cases previously discussed holding that the failure to comply with Business Corporation Law § 307 “is jurisdictional and does not constitute a ‘mere irregularitly]’ subject to cure” (Flannery v General Motors Corp.,
Conclusion and Order
Service on a foreign unauthorized corporation may be effected by service on the Secretary of State of the foreign State .only if the laws of that' jurisdiction appoint the foreign Secretary of State as an agent for the service of process. However, all of the foreign statutory prerequisites to the appointment of the foreign Secretary of State must be satisfied. Since plaintiffs have failed to establish that these prerequisites were satisfied, service upon the foreign Secretary of State was defective. However, defendant Worthington, by its failure to timely move for dismissal, has waived its defense of improper service, and therefore, its motion to dismiss is, in all respects, denied.
Notes
. Under the present state of the law in New York, this former distinction between service on domestic and foreign corporations has been abolished. (See, McLaughlin, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C311:l, at 377.) Consequently, applying the reasoning expressed in Howard Converters (supra) to the present situation, service on a foreign corporation served outside of the State must be accomplished by service in a manner consistent with service on a corporation (domestic or foreign) within New York State.
. It does not avail defendant to argue that the motion is more akin to a motion for summary judgment, as the 120-day time limit which applies to motions for summary judgment also began to run on January 1, 1997. (See, Phoenix Garden Rest, v Chu,