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ROWLAND v. GIFTCERTIFICATES.COM

April 1, 2002

GREGORY ROWLAND PLAINTIFF,
V.
GIFTCERTIFICATES.COM, INC. DEFENDANT.



The opinion of the court was delivered by: Sand, District Judge.

OPINION and ORDER

On October 12, 2001, Plaintiff Gregory Rowland ("Rowland") brought suit in New York State Supreme Court, Bronx County, against Defendant Giftcerticates.com ("Gificertificates"), a Delaware corporation. On January 29, 2002, Defendant filed a notice of removal seeking to bring this action to federal district court. In this motion to remand, Plaintiff claims that the notice of removal was filed more than thirty days after Defendant was served with the summons and complaint, thus violating the thirty-day time frame in which a notice of removal must be filed. See 28 U.S.C. § 1446 (b). We deny Plaintiffs motion to remand.

Facts

On March 15, 2001, Plaintiff, wishing to pursue claims against Defendant for alleged employment discrimination, false imprisonment, negligence, and defamation, ascertained from the New York Secretary of State ("Secretary of State") that Gificertificates was an active foreign corporation authorized to do business in New York State with a service of process address given as 470 7th Avenue, 6th Floor, New York, N Y 10018. See Ivan Diamond Affidavit ¶ 4 ("Diamond Aff."); Complaint ¶¶ 30, 66, 78, 85, 99. On March 19, 2001, Plaintiffs counsel sent an acknowledgment of representation letter to Defendant at this address through certified mail return receipt requested. Id. On March 20, 2001, the return card was returned with the signature of "M. Vancol." Id. On March 22, 2001, Defendant's counsel responded to Plaintiffs March 19 letter and stated that they were unaware of any litigation between Rowland and Gificertificates. Id. at ¶ 7.

On October 12, 2001, Plaintiffs counsel reconfirmed with the Secretary of State that Defendant was a foreign corporation in good standing with the same service of process address. Id. at ¶ 8. That same day, Plaintiff commenced this action in New York State Supreme Court, Bronx County. Id. Plaintiffs summons and complaint was served on the Secretary of State pursuant to the New York Business Corporation Law § 306 ("Bus. Corp. Law"), and the required fee was paid. Id. at ¶ 9. Upon receiving no answer to the complaint by December 7, 2001, Plaintiffs counsel personally mailed a copy of the summons and complaint to Defendant's service of process address and to Defendant's counsel. Id. at ¶ 10. Defendant received this second summons and complaint on January 9, 2002 at its Seattle, Washington office. See Defendant's Memorandum 2. Defendant states that it had moved from its New York headquarters on June 30, 2001, and its mail was thereafter forwarded to its Seattle office. See Michael Ahern Affidavit ¶ 4, 5 ("Ahern Aff.").

On January 31, 2002, Plaintiff received a notice of removal dated January 29, 2002. Id. at ¶ 11. On February 7, 2002, Plaintiffs counsel requested from the Secretary of State any documents that were filed by Defendant. On February 20, 2002, Plaintiffs counsel asked the Secretary of State for any documents relating to service of process on Defendant in this matter. With respect to the service of process of Defendant, the Secretary of State produced a document stating that the "envelope containing the process was returned by the Postal Service with the following notation: Forwarding Order Expired." Diamond Aff., Ex. C, at 7. There are no submissions from the parties that suggest Defendant received the November 11, 2001 mailing from the Secretary of State.

Plaintiff now claims that Defendant did not file a notice of removal within the thirty days required by Fed. R. Civ. Pro § 1446(b).

Discussion

For a foreign corporation to be authorized in New York, it must apply for such authority and designate "the secretary of state as its agent upon whom process against it may be served and the post office address within or without this state to which the secretary of state shall mail a copy of any process against it served upon him." Bus. Corp. Law § 1304. Defendant in fact applied for authority in New York pursuant to Bus. Corp. Law § 1304 on October 9, 1997, was granted such authority, and designated the Secretary of State as the agent of the corporation for purposes of service of process. See Diamond Aff., Ex. F.

Section 28 U.S.C. § 1446(b) states:

The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has been filed in court and is not required to be served on defendant, whichever period is shorter.

Fed. R. Civ. P. § 1446(b).*fn1 The critical issue here is whether Defendant filed a notice of removal within thirty days of "receipt" of the initial pleading through "service." Id. Plaintiff claims that Defendant was served on November 11, 2001 when the Secretary of State mailed a copy of process to Defendant.*fn2 See Diamond Aff., Ex. C. By contrast, Defendant claims that it was not served until January 9, 2002 when it received the complaint at its offices in Seattle, Washington. See Diamond Aff., Ex. H. If Defendant was served on November 11, 2001 or shortly thereafter, the January 29, 2002 notice of removal would be untimely and the case should be remanded to state court. If Defendant was served on January 9, 2002, the notice of removal would be timely and the motion to remand should be denied.

Defendant will prevail if (a) Defendant's failure to receive the November 11, 2001 service of process was not the result of some dereliction on its part, such as a failure to provide for the forwarding of its mail by the Postal Service, (b) Defendant did not violate a statutory duty or obligation that prevented its timely receipt of the November 11, 2001 service of process, and (c) Defendant did not receive the summons and complaint under a theory of constructive receipt.

A. Dereliction with Respect to the Forwarding Order

The first issue is whether the Defendant was derelict in some manner with regard to having its mail forwarded from its New York address to its Seattle office. If Defendant was derelict in failing to file the proper forwarding order with the Postal Service, then Plaintiff may be able to argue persuasively that service of process was effected on November 11, 2001 or soon thereafter even though Defendant did not receive the service of process until January 9, 2002.

In general, this court has found that the "heavy weight of authority is to the effect that the time for removal, in cases in which service is made on a statutory agent, runs from receipt of the pleading by the defendant rather than by the statutory agent." Cygielman v. Cunard Line Ltd., 890 F. Supp. 305, 307 (S.D.N.Y. 1995) (citing cases) (emphasis added); Medina, 945 F. Supp. at 520 ("That the New York Business Corporation Law recognizes service of process as being complete in civil actions brought against a corporation authorized to do business in the state once the Secretary of State has been served is not relevant to [the] question whether defendant's notice of removal is timely."). Moreover, the "defendant's right to a federal forum ought not to depend upon the rapidity and accuracy with which statutory agents inform their principals of the commencement of litigation against them." Cygielman, 890 F. Supp. at 307. See also Cancel v. Challenge Printing Company, 1996 WL 701022 (S.D.N.Y. 1996) (finding that the New York Secretary of State is considered a statutory agent for service of process purposes). If service of process is lost in the mail or is returned to the sender as a result of the Postal Service's error, the intended recipient is not and should not be held ...


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