GILLESPIE, NANCY D. v. INTER-CONTINENTAL HOTELS CORPORATIO ( 2011 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
736
CA 10-02308
PRESENT: SMITH, J.P., FAHEY, CARNI, LINDLEY, AND GORSKI, JJ.
NANCY D. GILLESPIE AND PATRICK GILLESPIE,
PLAINTIFFS-RESPONDENTS,
V MEMORANDUM AND ORDER
INTER-CONTINENTAL HOTELS CORPORATION,
ET AL., DEFENDANTS,
AND GRAND HOTEL INTER-CONTINENTAL PARIS SNC,
DEFENDANT-APPELLANT.
HOWARD W. BURNS, JR., NEW YORK CITY, FOR DEFENDANT-APPELLANT.
LECLAIR KORONA GIORDANO COLE LLP, ROCHESTER (JOHN C. NUTTER OF
COUNSEL), FOR PLAINTIFFS-RESPONDENTS.
Appeal from an order of the Supreme Court, Monroe County (William
P. Polito, J.), entered August 31, 2010 in a personal injury action.
The order denied the motion of defendant Grand Hotel Inter-Continental
Paris SNC to dismiss the amended complaint against it.
It is hereby ORDERED that the order so appealed from is reversed
on the law without costs, the motion is granted and the amended
complaint against defendant Grand Hotel Inter-Continental Paris SNC is
dismissed.
Memorandum: In this personal injury action, defendant Grand
Hotel Inter-Continental Paris SNC (Hotel) appeals from an order
denying its pre-answer motion to dismiss the amended complaint against
it. We agree with the Hotel that Supreme Court erred in denying the
motion, and we therefore reverse.
Plaintiffs concede that the Hotel is a foreign corporation not
authorized to do business in New York State. Consequently, they were
required to comply with Business Corporation Law § 307 to effect
service of the supplemental summons and amended complaint upon the
Hotel (see Reyes v Harris Press & Shear, 256 AD2d 564). “The
incontestable starting proposition in cases of this kind is that once
jurisdiction and service of process are questioned, plaintiffs have
the burden of proving satisfaction of statutory and due process
prerequisites” (Stewart v Volkswagen of Am., 81 NY2d 203, 207).
“Business Corporation Law § 307 establishes a mandatory sequence and
progression of service completion options to acquire jurisdiction over
a foreign corporation not authorized to do business in New York . . .
First, process must be personally served upon the Secretary of State
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CA 10-02308
in the City of Albany or his or her deputy or authorized agent for
service . . . Then, as is relevant here, notice of the service and a
copy of the process must be [s]ent . . . to such foreign corporation
by registered mail with return receipt requested, at the post office
address specified for the purpose of mailing process, on file in the
department of state . . . in the jurisdiction of its incorporation, or
if no such address is there specified, to its registered or other
office there specified, or if no such office is there specified, to
the last [known] address of such foreign corporation . . . The Court
of Appeals has made clear that the precisely . . . delineated sequence
set forth in the statute compels a plaintiff to proceed in a strict
sequential pattern and that the failure to do so is a jurisdictional
defect requiring dismissal” (VanNorden v Mann Edge Tool Co., 77 AD3d
1157, 1158-1159 [internal quotation marks omitted]; see § 307 [b];
Flick v Stewart-Warner Corp., 76 NY2d 50, 57, rearg denied 76 NY2d
846).
Consequently, “[p]laintiffs were obligated in the first instance
to ascertain that there was no post office address specified for [the
Hotel] to receive process or other registered or office address for
[the Hotel] on file with the [French] equivalent of the Secretary of
State before descending to the next level of notification options,
i.e., mailing a copy of the process to ‘the last address [of the
Hotel] known to the plaintiff[s]’ ” (Stewart, 81 NY2d at 208, quoting
Business Corporation Law § 307 [b] [2]). Inasmuch as plaintiffs
failed to establish that they attempted to ascertain whether an
address was on file with such a French official or body, they failed
to meet their burden of establishing that they followed the mandatory
sequence set forth in the statute. Failure to comply with section 307
is a jurisdictional defect, and thus dismissal of the amended
complaint against the Hotel is required.
The Hotel’s remaining contention is moot in light of our
determination.
All concur except GORSKI, J., who dissents and votes to affirm in
the following Memorandum: I respectfully dissent, inasmuch as I
conclude that Supreme Court properly denied the pre-answer motion of
defendant Grand Hotel Inter-Continental Paris SNC (Hotel) seeking to
dismiss the amended complaint against it. As the majority states,
“ ‘Business Corporation Law § 307 establishes a mandatory sequence and
progression of service completion options to acquire jurisdiction over
a foreign corporation not authorized to do business in New York’ ”
(VanNorden v Mann Edge Tool Co., 77 AD3d 1157, 1158, quoting Stewart v
Volkswagen of Am., 81 NY2d 203, 207; see § 307 [b]). The statute
requires that “notice of the service and a copy of the process . . .
be ‘[s]ent . . . to such foreign corporation by registered mail with
return receipt requested, at the post office address specified for the
purpose of mailing process, on file in the department of state[, or
with any official or body performing the equivalent function,] in the
jurisdiction of its incorporation, or if no such address is there
specified, to its registered or other office there specified, or if no
such office is there specified, to the last [known] address of such
foreign corporation’ ” (VanNorden, 77 AD3d at 1158, quoting § 307 [b]
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CA 10-02308
[2]).
In support of its motion, the Hotel challenged the court’s
jurisdiction over it on the ground that plaintiffs’ affidavit of
compliance with Business Corporation Law § 307 was silent with respect
to whether the address where plaintiffs sent the notice of service and
a copy of the process was the one registered for that purpose with the
French equivalent of the department of state. In opposition to the
motion, plaintiffs submitted the affidavit of their attorney, who
averred that, based on his research, the Paris address to which he
sent the notice of service and a copy of the process was the address
listed for the Hotel in the “official registry of French companies.”
Thus, contrary to the conclusion of the majority, plaintiffs submitted
evidence establishing that they “attempted to ascertain whether an
address was on file with [the appropriate] French official or body . .
. .” Further, although it appears that the documents attached to the
affidavit of plaintiffs’ attorney were from a commercial enterprise
providing information regarding companies listed in that French
registry, rather than from the official registry itself, the Hotel
makes no allegation in reply that the address to which plaintiffs sent
the process is not “the post office address specified for the purpose
of mailing process, on file . . . with an[] official or body
performing the equivalent function” of the department of state (§ 307
[b] [2]). Thus, I conclude that plaintiffs met their burden of
establishing “that the specified steps for gaining jurisdiction by
service and notice were precisely followed in the delineated sequence
set forth in the statute” (Stewart, 81 NY2d at 207-208). Notably, the
procedures contained in Business Corporation Law § 307 are “calculated
to assure that the foreign corporation[] in fact[] receives a copy of
the process” (Flick v Stewart-Warner Corp., 76 NY2d 50, 56, rearg
denied 76 NY2d 846) and, here, there is no dispute that the Hotel
actually received the process. I would therefore affirm.
Entered: June 17, 2011 Patricia L. Morgan
Clerk of the Court