MURRAY v. NETZ 642 96TH STREET LLC (2026)

DECISION & ORDER

In an action, inter alia, to recover damages for breach of the warranty of habitability, the plaintiff appeals from a second amended order of the Supreme Court, Kings County (Saul Stein, J.), dated May 22, 2024.  The second amended order (1) granted that branch of the defendants' motion which was, in effect, pursuant to CPLR 5015(a)(4) to vacate an order of the same court (Richard J. Montelione, J.) dated December 9, 2020, granting the plaintiff's motion for leave to enter a default judgment against the defendants, and to vacate a judgment of the same court (Joy Campanelli, J.) entered July 25, 2022, which is in favor of the plaintiff and against the defendants in the total sum of $350,225, (2) upon vacatur of the order dated December 9, 2020, and of the judgment entered July 25, 2022, granted that branch of the defendants' motion which was pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against the defendant NETZ 642 E. 96th Street, LLC, and (3) referred the matter to a referee for a hearing to determine the validity of service of process upon the defendant David Lipsh.

ORDERED that the appeal from so much of the second amended order as referred the matter to a referee for a hearing to determine the validity of service of process upon the defendant David Lipsh is dismissed;  and it is further,

ORDERED that the second amended order is modified, on the law, by deleting the provision thereof granting that branch of the defendants' motion which was pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against the defendant NETZ 642 E. 96th Street, LLC;  as so modified, the order is affirmed insofar as reviewed, without costs or disbursements, and the matter is remitted to the Supreme Court, Kings County, for a hearing and new determination thereafter of that branch of the defendants' motion which was pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against the defendant NETZ 642 E. 96th Street, LLC.

The defendant NETZ 642 E. 96th Street, LLC (hereinafter NETZ), is the owner of a residential property at which the plaintiff is a tenant.  The defendant David Lipsh is a managing agent for NETZ. On October 10, 2019, the plaintiff commenced this action against the defendants, inter alia, to recover damages for breach of the warranty of habitability.  The defendants did not timely answer or otherwise respond to the complaint.  On December 9, 2020, the Supreme Court granted the plaintiff's motion for leave to enter a default judgment against the defendants (hereinafter the default judgment order).  Following an inquest, on July 25, 2022, the court entered a judgment in favor of the plaintiff and against the defendants in the total sum of $350,225.

On January 19, 2023, the defendants moved, among other things, in effect, pursuant to CPLR 5015(a)(4) to vacate the default judgment order and the judgment and, upon vacatur, pursuant to CPLR 3211(a)(8) to dismiss the complaint.  In a second amended order dated May 22, 2022, the Supreme Court, inter alia, (1) granted that branch of the defendants' motion which was, in effect, pursuant to CPLR 5015(a)(4) to vacate the default judgment order and the judgment, (2) upon vacatur, granted that branch of the defendants' motion which was pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against NETZ, and (3) referred the matter to a referee for a hearing to determine the validity of service of process upon Lipsh.  The plaintiff appeals.

“It is axiomatic that the failure to serve process in an action leaves the court without personal jurisdiction over the defendant, and all subsequent proceedings are thereby rendered null and void” (Hossain v. Fab Cab Corp., 57 A.D.3d 484, 485, 868 N.Y.S.2d 746 [internal quotation marks omitted];  see Matter of Exxon Mobil Corp. v. New York City Dept. of Envtl. Protection, 178 A.D.3d 696, 698, 114 N.Y.S.3d 88).

Ordinarily, a process server's affidavit constitutes prima facie evidence that the defendant was validly served (see Aurora Loan Servs., LLC v. Simon, 216 A.D.3d 716, 717, 189 N.Y.S.3d 535;  HSBC Bank USA v. Archer, 173 A.D.3d 984, 985, 104 N.Y.S.3d 150).  “To be entitled to vacatur of a default under CPLR 5015(a)(4), a defendant must overcome the presumption raised by the affidavit of service” (HSBC Bank USA v. Archer, 173 A.D.3d at 985, 104 N.Y.S.3d 150;  see Wilmington Sav. Fund Socy., FSB v. Zabrowsky, 212 A.D.3d 866, 869, 183 N.Y.S.3d 480;  Federal Natl. Mtge. Assn. v. Castoldi, 187 A.D.3d 988, 989, 134 N.Y.S.3d 87).  Service of process on a limited liability company may be made on, among others, “any ․ agent authorized by appointment to receive process, or ․ any other person designated by the limited liability company to receive process” (CPLR 311–a[a][iii], [iv] ).

Here, an affidavit of the plaintiff's process server, in which the process server averred that he served the summons and complaint on Ian Axelrod at the Shiponi Law Firm, a “person designated to receive process,” and averred that Axelrod stated that he was authorized to accept the papers, constituted prima facie evidence of proper service on NETZ pursuant to CPLR 311–a(a)(iv) (see Purzak v. Long Is. Hous. Servs., Inc., 149 A.D.3d 989, 991, 53 N.Y.S.3d 112;  Interboro Ins. Co. v. Tahir, 129 A.D.3d 1687, 1688, 12 N.Y.S.3d 688;  Miterko v. Peaslee, 80 A.D.3d 736, 737, 915 N.Y.S.2d 314).  However, Lipsh's affidavit submitted in support of the defendants' motion, in which Lipsh denied that the Shiponi Law Firm was authorized to accept service on behalf of NETZ, rebutted the presumption of proper service (see Purzak v. Long Is. Hous. Servs., Inc., 149 A.D.3d at 991, 53 N.Y.S.3d 112;  Rosario v. NES Med. Servs. of N.Y., P.C., 105 A.D.3d 831, 832–833, 963 N.Y.S.2d 295;  Miterko v. Peaslee, 80 A.D.3d at 737, 915 N.Y.S.2d 314).  Contrary to the determination of the Supreme Court, however, Lipsh's affidavit did not conclusively establish that service on NETZ was improper (see Purzak v Long Is. Hous. Servs., Inc., 149 A.D.3d at 992, 53 N.Y.S.3d 112).  Rather, a hearing must be held at which the plaintiff will bear the burden of establishing proper service by a preponderance of the evidence (see id.;  Rosario v. NES Med. Servs. of N.Y., P.C., 105 A.D.3d at 833, 963 N.Y.S.2d 295).  Accordingly, the matter must be remitted to the Supreme Court, Kings County, for a hearing and a new determination thereafter of that branch of the defendants' motion which was pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against NETZ.

The appeal from so much of the second amended order as referred the matter to a referee for a hearing to determine the validity of service of process upon Lipsh must be dismissed.  That provision of the second amended order merely directed a judicial hearing to aid in the disposition of a motion and does not affect a substantial right (see CPLR 5701[a][2][v];  U.S. Bank N.A. v. Roque, 172 A.D.3d 948, 949–950, 101 N.Y.S.3d 165;  Bank of N.Y. v. Segui, 120 A.D.3d 1369, 1370, 993 N.Y.S.2d 330).

In light of our determination, we need not reach the parties' remaining contentions.

CHAMBERS, J.P., DOWLING, WAN and MCCORMACK, JJ., concur.