AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY INC v. SYNERGY HEALTHCARE SERVICES (2022)

In this action to collect on sums assertedly owed under a corporate credit-card agreement, plaintiff, American Express Travel Related Services Company, Inc., moves for default judgment under CPLR 3215. The motion is denied.

To obtain default judgment, a movant must establish valid service, the nonmovant's default, and the facts constituting the movant's claim. (See CPLR 3215 [f].) Here, plaintiff served defendant in Florida under CPLR 313. (See NYSCEF No. 3.) The text of CPLR 313 provides that this form of service is permissible only if the party being served is domiciled in New York or if the party is “subject to the jurisdiction of the courts” of New York under CPLR 301 or 302.¹ There is no indication in the record that defendant is domiciled in New York. To the contrary, plaintiff served defendant at a Florida address, and the underlying contract describes defendant as a Florida corporation. Nor does plaintiff rely on the existence of a form of personal jurisdiction predating the CPLR and continued in effect by CPLR 301.

The question, therefore, is whether plaintiff has shown that this court has longarm jurisdiction over defendant under CPLR 302. Plaintiff has not shown on this motion that longarm jurisdiction exists—or even attempted to do so.² This is an action for a breach of a commercial credit card contract. As a result, the only potential basis for longarm jurisdiction is that defendant has “transact[ed] ․ business within the state.” (CPLR 302 [a] [1].) Plaintiff is a New York corporation. But plaintiff's papers submitted in support of its default-judgment motion do not offer any evidence indicating that defendant ever transacted business with plaintiff in New York.

Absent a showing that longarm personal jurisdiction exists, plaintiff has not established that its service of process on defendant in Florida was valid under CPLR 313. Plaintiff is thus not entitled on this record to default judgment.

This court does not rule out the possibility that plaintiff could yet establish the presence of longarm jurisdiction, such that its out-of-state service was proper. This court therefore declines to dismiss the action sua sponte, and instead only denies the default-judgment motion without prejudice. Any renewed default-judgment motion by plaintiff should address the fact that although defendant is a Florida corporation, the charges for which plaintiff is now seeking to collect were incurred over a period of a month in the Cleveland, Ohio, area—many of them seemingly for personal, rather than corporate expenses.³ (See NYSCEF No. 17 at 4-5, 8-9.)

Accordingly, it is

ORDERED that plaintiff's motion for default judgment under CPLR 3215 is denied without prejudice; and it is further

ORDERED that if plaintiff does not file a renewed motion for default judgment within 60 days of entry of this order, the action will be administratively dismissed; and it is further

ORDERED that plaintiff serve a copy of this order with notice of its entry on defendant by overnight mail to defendant's last known address.

FOOTNOTES

1.   CPLR 313 also requires that an out-of-state resident making service out of state be “authorized to make service by the laws of the state” or a “duly qualified attorney ․ in such jurisdiction.” Plaintiff's affidavit of service does not indicate whether the person serving process here meets these requirements. This defect, and also the absence of a certificate of conformity under CPLR 2309 (c), are merely “technical infirmit[ies]” that this court disregards under CPLR 2001. (Ruffin v Lion Corp., 15 NY3d 578, 582-583 [2010] [internal quotation marks omitted].) Additionally, although service here was made a week after the 120-day deadline set by CPLR 306-b, plaintiff has established good cause for that brief delay.

2.   At most, plaintiff's complaint alleges that personal jurisdiction is “established pursuant to the agreement which provides that ․ the sole venue for any litigation shall be an appropriate federal or state court located in New York.” (NYSCEF No. 1 at 8.) Even if this allegation were correct, it would not satisfy the independent longarm jurisdiction requirement of CPLR 313, which operates as a precondition of valid service. And it is not correct. The provision of the contract on which plaintiff relies, § 14, “is in the nature of a forum-selection clause, not a waiver of otherwise-applicable jurisdictional defenses.” (JMB Capital Partners Lending v Shin, 2022 NY Slip Op 50087[U], at *2 [Sup Ct, NY County Feb. 14, 2022], citing CV Holdings, LLC v Bernard Tech., Inc., 14 AD3d 854, 854 [3d Dept 2005].) Indeed, this provision expressly waives defenses based on venue and forum non conveniens—but not defenses based on lack of personal jurisdiction. (See NYSCEF No. 16 at 8 § 14.)

3.   Plaintiff's client affidavit represents that “[t]here is no record of Defendant ever asserting a valid, unresolved objection to the balance shown as due and owing on the monthly statements provided to Defendant.” (NYSCEF No. 15 at 8.) This representation leaves unclear whether defendant failed to object to the charges underlying that balance, or instead that plaintiff had concluded that objections raised by defendant were not valid.

Gerald Lebovits, J.