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RBC Capital Markets Corp. v. Bittner

April 20, 2009

IN THE MATTER OF THE APPLICATION OF RBC CAPITAL MARKETS CORPORATION, PETITIONER,
v.
BRIAN M. BITTNER, RESPONDENT.



The opinion of the court was delivered by: Michael D. Stallman, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the printed Official Reports.

Petitioner RBC Capital Markets Corporation seeks to confirm an arbitration award rendered in its favor against respondent Brian M. Bittner, a former employee, resulting from an arbitration before the NASD Dispute Resolution, Inc. The three-person arbitration panel rendered an award granting petitioner enforcement of the terms of a settlement agreement involving a dispute over a loan that petitioner made to respondent. Two arbitrators signed the award on May 15, 2007; the third arbitrator signed the award on May 16, 2007. Petitioner commenced this proceeding to confirm the award on May 13, 2008.

Respondent moved to dismiss the petition for lack of personal jurisdiction, due to a lack of service, and lack of subject matter jurisdiction, i.e., petitioner allegedly did not seek to confirm the award within one year of the award was rendered (Motion Seq. No. 003). Petitioner cross-moved for an extension of the time to serve the pleadings and for an order approving an alternative means of service upon respondent's attorney. By interim order dated September 29, 2008, the issue of whether respondent was properly served with the notice of petition and petition to confirm the arbitration award was referred to a Special Referee to hear and report with recommendations. The motion and cross motion were held in abeyance pending the report of the Special Referee.

Respondent moves for an order confirming the report of the Special Referee; petitioner cross-moves for an order rejecting the report. This decision address the motion and cross motion (Seq No. 005), and also addresses motion and cross motion previously held in abeyance (Seq. No. 003).

BACKGROUND

The notice of petition and petition to confirm were allegedly served upon respondent by affix and mail service at 7471 Street Hwy 80, Cooperstown, NY 13326, the address allegedly listed on respondent's driver's license. In addition, respondent was allegedly served by affix and mail service at 27 Bonn Place, Weehawken, New Jersey 07086. Respondent disputed service, claiming that he did not reside where service was made. By interim decision and order dated September 29, 2008, the issue of whether respondent was properly served with the notice of petition and petition to confirm an arbitration award was referred to a Special Referee to hear and report with recommendations.

Included in this issue referred to the Special Referee was the issue of whether respondent should be estopped from claiming defective service for a possible failure to notify the Department of Motor Vehicles of his change of residence, as required by Vehicle and Traffic Law § 505 (5). Candela v Johnson, 48 AD3d 502, 503 (2d Dept 2008); Stillman v City of New York, 39 AD3d 301, 303 (1st Dept 2007). Vehicle and Traffic Law § 505 (5) requires the holder of a driver's license to report a change of address to the New York State Department of Motor Vehicles within ten days of the change of address. The matter was assigned to Special Referee Louis Crespo, who held a hearing on December 9, 2008, and issued his report and recommendation dated January 2, 2009.

At the hearing, an investigator testified on behalf of respondent. The investigator testified that a motor vehicle license search revealed an address for respondent: 7471 Street Hwy 80, Cooperstown, New York, 13326. Report, at 2 [Findings of Fact ¶ 4]. Respondent stipulated that he did not notify the New York State Department of Motor Vehicles when he moved from the Cooperstown, New York address, as required under Vehicle and Traffic Law § 505 (5). Id., at 4 [Findings of Fact ¶ 12]. Petitioner submitted an affidavit of service at the Cooperstown, New York address, which the Referee found indicated affix and mail service after prior attempts of personal delivery at the address. Ibid. [Findings of Fact ¶ 11].

Special Referee concluded that "the estoppel rule (or defense) under Vehicle and Traffic Law § 505 (5) is not germane to this proceeding." Report, at 7 [Conclusions of Law ¶ 9]. Reviewing the case law, the Special Referee found that, in cases that involve claims arising from motor vehicle incidents, a licensee was estopped from raising jurisdictional defenses where he or she fails to comply with the notice requirements of Vehicle and Traffic Law § 505 (5), when the licensee is sued for damages. Ibid. [Conclusions of Law ¶ 8]. The Special Referee concluded that he "found no case law to suggest that Vehicle and Traffic Law § 505 (5) is applicable to all actions (tort, contract, landlord tenant, mortgages, subrogation, etc.) against a party who once held a New York license and who has since moved from the last known address noted on his, her or its New York license." Ibid. [Conclusions of Law ¶ 9].

As to service at the Weehawken, New Jersey address, the Special Referee found that petitioner did not demonstrate due diligence in ascertaining whether respondent resided at the Weehawken address in June 2008, when affix and mail service was made. Id., at 9 [Conclusions of Law ¶ 16]. Accordingly, the Special Referee concluded that petitioner failed to carry its burden of demonstrating that service upon respondent was properly made.

I.

"It is well settled that the report of a Special Referee shall be confirmed whenever the findings contained therein are supported by the record and the Special Referee has clearly defined the issues and resolved matters of credibility, since the Special Referee is considered to be in the best position to determine the issues presented."

Nager v Panadis, 238 AD2d 135, 135-136 (1st Dept 1997)(internal citations omitted). However, the court is not bound by the referee's recommendation and his or her determination. Garrick-Aug Assocs. Store Leasing v Shefa Land Corp., 270 AD2d 68, 69 (1st Dept 2000). CPLR 4403 provides that the court has the power to confirm or reject "in whole or in part * * * the report of a referee to report; may make new findings with or without taking additional testimony; and may order a new ...


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