July 30, 2013
Karen RICH, individually, and derivatively, on behalf of the 255 Cabrini Condominium, Petitioner,
BOARD OF MANAGERS OF THE 255 CABRINI CONDOMINIUM, Nancy Ancowitz, Richard Ancowitz, Michael Augenblick, Eileen Bernstein, William Cameron, Eva Halfon, Ed Jurewicz, Mike Jurewicz, Ken Weissman, 123 Lowtide Associates, Arthur Ancowitz, as Trustee for the Arthur Ancowitz Revocable Trust, Marijane Ancowitz Kanner, Lynne R. Barasch, Ges Group LLC, and Richard Ancowitz, as Trustee for the Spencer Cameron Trust, Respondents. No. 152547/13.
This decision has been referenced in a table in the New York Supplement.
Gallet Dreyer & Berkey, LLP, by David L. Berkey, Esq., Joseph V. Aulicino, Esq., New York, for respondents 123 Lowtide Associates, Arthur Ancowitz, as Trustee for the Arthur Ancowitz Revocable Trust, Marijane Ancowitz Kanner, Lynne R. Barasch, GES Group LLC, and Richard Ancowitz, as Trustee for the Spencer Cameron Trust (the Sponsor Respondents).
Cantor, Epstein & Mazzola, LLP By Gray Ehrlich, Esq. New York, for respondents Board of Managers of the 255 Cabrini Condominium, Nancy Ancowitz, Richard Ancowitz, Michael Augenblick, Eileen Bernstein, William Cameron, Eva Halfon, Ed Jurewicz, Mike Jurewicz, Ken Weissman.
MICHAEL D. STALLMAN, J.
Upon the foregoing papers, it is ORDERED that petitioner's motion for an extension of time to serve the pleadings is granted; and it is further
ORDERED that the time for petitioner to personally serve the pleadings upon respondents 123 Lowtide Associates, Arthur Ancowitz, as Trustee for the Arthur Ancowitz Revocable Trust, Marijane Ancowitz Kanner, Lynne R. Barasch, GES Group LLC, and Richard Ancowitz, as Trustee for the Spencer Cameron Trust is hereby extended to August 29, 2013.
In this special proceeding, petitioner seeks to set aside and annul an election of the board of managers that was held on October 25, 2012. The proceeding was e-filed on March 20, 2013, more than four months after the election was held. Petitioner asserts that, in an agreement between the Board of Managers of the 255 Cabrini Condominium and a group of residential condominium unit owners, known as the " 255 Cabrini Concerned Owners Group", the Board purportedly agreed to toll the statute of limitations pertaining to the commencement of any action or special proceeding challenging the election. The purported agreement was signed by petitioner, Karen Rich, on behalf of 255 Cabrini Concerned Owners Group, and by Michael Augenblick, as President of the Board of Managers of the 255 Cabrini Condominium.
Previously, petitioner sought, by order to show cause, a preliminary injunction against the current board of managers (Motion Seq. No. 001). In a stipulation dated March 28, 2013, between Braverman Greenspun P.C. and Rosen Livingston & Cholst LLP, the attorneys agreed
" that the law firm of Rosen Livingston & Cholst LLP hereby appears in this proceeding on behalf of the respondents, the Board of Managers of the 255 Cabrini Condominium ... 123 Lowtide Associates, Arthur Ancowitz as Trustee for the Arthur Ancowitz Revocable Trust, Marijane Ancowitz Kanner, Lynne R. Barasch, GES Group LLC, and Richard Ancowitz as Trustee for the Spencer Cameron Trust (collectively, the Respondents')....
that Rosen Livingston & Cholst LLP has agreed to accept service on behalf of the Respondents of the order to show cause (OTSC') issued in the within proceeding and the papers upon which it is based— including the Petition."
(Peterson Aff., Ex C.) The petition was apparently served upon Rosen Livingston & Cholst LLP on March 28, 2013. ( See Peterson Aff., Ex D.)
Respondents 123 Lowtide Associates, Arthur Ancowitz, as Trustee for the Arthur Ancowitz Revocable Trust, Marijane Ancowitz Kanner, Lynne R. Barasch, GES Group LLC, and Richard Ancowitz, as Trustee for the Spencer Cameron Trust (collectively, the Sponsor Respondents) assert that Rosen Livingston & Cholst LLP did not represent them, and therefore was not authorized to accept service on behalf of the Sponsor Respondents. The Sponsor Respondents have cross-moved to dismiss the proceeding as against them for lack of personal jurisdiction (Motion Seq. No. 001). By an interim decision and order dated May 31, 2013, this Court directed a hearing, inter alia, as to whether personal service upon the Sponsor Respondents was properly made upon Rosen Livingston & Cholst LLP. The hearing before a Special Referee has been scheduled for September 3, 2013.
Pursuant to CPLR 306-b, petitioner now seeks leave for an extension of time to serve the Sponsor Respondents. The Sponsor Respondents oppose the motion.
" CPLR 306— b authorizes an extension of time for service in two discrete situations: upon good cause shown' or in the interest of justice' ( Leader v. Maroney, Ponzini & Spencer, 97 N.Y.2d 95, 104-106, 736 N.Y.S.2d 291, 761 N.E.2d 1018  ).... A good cause' extension requires a showing of reasonable diligence in attempting to effect service upon a defendant. At least one Appellate Division decision has suggested that good cause is likely to be found where the plaintiff's failure to timely serve process is a result of circumstances beyond [its] control' ( Bumpus v. New York City Tr. Auth., 66 A.D.3d 26, 32, 883 N.Y.S.2d 99  [noting difficulties of service with person in military or difficulties with service abroad through Hague Convention] )."
( Henneberry v. Borstein, 91 A.D.3d 493, 495-496 [1st Dept 2012].)
In the exercise of discretion, the Court grants petitioner's motion for an extension of time to effect service of process upon the Sponsor Respondents for good cause. Petitioner exercised reasonable diligence in attempting to serve the Sponsor Respondents. Petitioner attempted to effect service of process upon the Sponsor Respondents by service upon Rosen Livingston & Cholst LLP, whom petitioner believed represented the Sponsor Respondents. Bruce Cholst, Esq. executed a stipulation in this action which stated that Rosen Livingston & Cholst LLP represented the Sponsor Respondents.
" The general rule, that an appearance by attorney, whether for the plaintiff or the defendant, if there be no collusion, may be recognized by the adverse party as authentic and valid ...
When, pending a litigation, the authority of the attorney to appear is denied, and application is made in due season, the court, if probable cause appears, would, in general, protect the party applying. Still, the general rule remains, that a retainer will be presumed; and the adverse party, having no notice or ground of suspicion, may act on that presumption."
( Hamilton v. Wright, 10 Tiffany 502 ; cf. Gaston & Co. v. All Russian Zemsky Union, 221 A.D. 732 [1st Dept 1927] [" The authority of the defendant's attorney to appear upon its behalf having been questioned, the burden is cast, and naturally so, upon the one asserting the authority to prove the same, since he is in possession of the facts" ].) Once the Sponsor Respondents raised, in their cross motion to dismiss, that they had not retained Rosen Livingston & Cholst LLP to represent them, petitioner promptly sought leave for an extension pursuant to CPLR 306-b.
Gonzalez v. New York City Health and Hospitals Corp. (29 A.D.3d 369 [1st Dept 2006] ), which the Sponsor Respondents cite, is distinguishable. There, the plaintiff commenced an action against a hospital and others arising from the plaintiff's complications from surgery. The plaintiff in Gonzalez admittedly did not serve the summons and complaint within 120 days after the action was commenced. The plaintiff moved an extension of time to serve under CPLR 306-b, while the defendants moved to dismiss the complaint as time-barred. The lower court granted the motion to dismiss the complaint as time-barred and denied the plaintiff's motion for an extension of time to serve process.
The Appellate Division, First Department affirmed the motion court, stating, " The action was already time-barred when the summons and complaint were filed; hence, the filing was a nullity, the action never was commenced, and there was no service period to extend." ( Gonzalez, 29 A.D.3d at 370.)
The result in Gonzalez is correct, in that the defendants in Gonzalez moved to dismiss the action as time-barred, which was granted. Once the action was dismissed, there was no action pending for which to grant a motion to extend the plaintiff's time to serve process. ( See Matter of Rodamis v. Cretan's Assn. Omonoia, Inc., 22 A.D.3d 859 [1st Dept 2005] [" After the previous proceeding was dismissed, there no longer was a timely-commenced, pending proceeding in which the petitioners could seek such leave" ]; Hambric v. McHugh, 289 A.D.2d 290 [2d Dept 2001] [" the Supreme Court was authorized to extend the plaintiffs' time to effect proper service only as to that timely-filed first action, and only while that first action was still pending" ].)
Here, as the Sponsor Respondents indicate, they moved to dismiss the complaint on the defenses of improper service and the statute of limitations.
However, unlike Gonzalez, this proceeding is still pending. The Court may not reach the issue of whether the petition is time-barred until the issue of whether the Court has personal jurisdiction over the Sponsor Respondents is resolved. ( See e.g. Flame S.A. v. Worldlink Intl. [Holding] Ltd., 107 A.D.3d 436 [1st Dept 2013] [" The court should have addressed the issue of personal jurisdiction before forum non conveniens because, if a court lacks jurisdiction over a defendant, it is without power to issue a binding forum non conveniens ruling as to' that defendant].)
As the Sponsor Respondents point out, the Appellate Division, First Department in Gonzalez appeared to hold that the filing of a time-barred action was, in itself, a nullity, which the Appellate Division, First Department subsequently reiterated in Baptiste v. Doe (89 A.D.3d 436 [1st Dept 2011], citing Gonzalez ). It appears that the Appellate Division, Second Department is adopting the proposition voiced in Gonzalez that the filing of a time-barred complaint is a nullity. ( See Singh v. New York City Health & Hosp. Corp., 107 A.D.3d 780 [2d Dept 2013].)
In this Court's view, the expiration of the statute of limitations, which is subject to waiver, is not the same kind of infirmity in the commencement of an action as other fatal defects that would render an action a nullity, like the commencement of an action against a party who died before the pleadings were filed. ( See Matter of Cohen v. Engoron, 72 A.D.3d 446 [1st Dept 2010] [underlying action was a nullity from its inception because the summons and complaint were filed after the death of named defendant] .) A nullity in commencement of the action would imply a defect that is so fundamental that it would deprive the court of power to entertain the action. ( See Manhattan Telecom. Corp. v. H & A Locksmith, Inc., 21 N.Y.3d 200 .) However, " the Statute of Limitations is generally viewed as a personal defense" ( John J. Kassner & Co., Inc. v. City of New York, 46 N.Y.2d 544, 550  ), which therefore does not go to the court's power. Nevertheless, Gonzalez appears to hold that the filing of a time-barred complaint renders the commencement of that action a nullity.
This Court notes that the proposition that the filing of a time-barred complaint is a nullity has profound repercussions upon every aspect of New York civil practice, and would be at odds with prior appellate cases. If a time-barred complaint is a nullity, then it would follow that a motion for a default judgment on a time-barred complaint should not be granted, and a court should have the power to dismiss a time-barred complaint on the basis that it is a nullity. However, in Orix Financial Services, Inc. v. Haynes (56 A.D.3d 377 [1st Dept 2008] ), the Appellate Division, First Department held, " the statute of limitations must be pleaded as an affirmative defense and cannot be asserted sua sponte by the court as a basis for denying an unopposed motion for a default judgment." In Atkins-Payne v. Branch (95 A.D.3d 912 [2d Dept 2012] ) the Appellate Division, Second Department reversed a decision of the Supreme Court, which had denied a motion for a default judgment and had dismissed, sua sponte, causes of action as time-barred.
If a time-barred petition is a nullity, then it would follow that the court should dismiss the petition as a time-barred " nullity" without having to join necessary parties to a time-barred proceeding. However, in Matter of 37 West Realty Co. v. New York City Loft Bd . (72 A.D.3d 406 [1st Dept 2010] ), the Appellate Division, First Department ruled that necessary parties should be joined to a special proceeding " even if the limitations period has expired."
Gonzalez is distinguishable from this case because other respondents in this proceeding executed a tolling agreement, and those respondents do not contend that the proceeding is time-barred. Because it cannot be said at this juncture that the proceeding would be time-barred against all the respondents, it cannot be said that, under Gonzalez, the commencement of the proceeding was a " nullity."
The Sponsor Respondents' remaining arguments, that the motion is untimely and improperly brought, lack merit. Contrary to the Sponsor Respondents' contention, the Court's decision on the prior cross motion to dismiss, which referred the matter to a Special Referee, did not purport to dismiss any portion of the complaint. The Sponsor Respondents' reliance on cases for the proposition that an extension to serve process must be made by a cross motion, is misplaced. In those cases, the request for an extension of time was made informally in opposition to a motion, rather than brought formally as a cross motion.( See e.g. Lee v. Colley Group McMontebello, LLC, 90 A.D.3d 1000 [2d Dept 2011][in her opposition papers, the plaintiff argued that, in the interest of justice, she should be given additional time to serve her summons with notice].)
Therefore, the Court grants petitioner's motion to extend her time to effect service of process upon the Sponsor Respondents on the ground of good cause only. However, petitioner has not met her burden of demonstrating entitlement to an extension of time in the interest of justice. Among the factors to be considered in granting an extension in the interest of justice is the meritorious nature of the cause of action. ( Leader v. Maroney, Ponzini & Spencer, 97 N.Y.2d 95, 105-106 .) Here, petitioner's contention-that the Sponsor Respondents' votes were cast in contravention of the condominium's bylaws— appears unlikely to succeed on the merits. ( See Mishkin v. 155 Condominium, 2 Misc.3d 1001(A) [Sup Ct, N.Y. County 2004].)
Finally, the Court notes that a hearing is scheduled before the Special Referee on September 3, 2013. Should petitioner effect service of the pleadings as directed in this order, and should the Sponsor Respondents not contest either the extension to serve or whether such service was properly made, then the parties are free to stipulate to cancel the hearing.