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Germain v. A.O. Smith Water Products Co.

Sup Ct, NY County

October 23, 2013

Robert Germain, Sr., Plaintiff,
A.O. Smith Water Products Co., et al., Defendants.

Unpublished Opinion

Attorneys for Plaintiffs: SETH A. DYMOND, ESQ. Belluck & Fox

Attorneys for Defendant: Eric J. Voigt, Esq. Mound Cotton Wollan & Greengrass One Battery Park Plaza

Sherry Klein Heitler, J.

In this asbestos personal injury action, Liberty Mutual Insurance Company ("Liberty Mutual") moves pursuant to CPLR § 602 to join this action with five similarly situated actions [1] on the issue of defendant Jenkins Bros. ("Jenkins") amenability to suit. [2] Liberty Mutual further seeks dismissal of the Actions pursuant to CPLR §§ 3211(a)(1), 3211(a)(7), and 3211(a)(8) for lack of personal jurisdiction, failure to state a cause of action, and on the basis of documentary evidence on the ground that Jenkins, as a fully dissolved and liquidated corporation, does not exist. Plaintiff Robert Germain, Sr. cross-moves: (1) pursuant to CPLR 311(a)(1) [3] and Business Corporation Law ("BCL") § 306 [4] for an order declaring that service of process has been properly effectuated on Jenkins in the Antle, Valensi, and Lantenschuetz cases; (2) pursuant to CPLR § 602 for an order joining the Actions under the global index number for all New York City Asbestos Litigation ("NYCAL") cases (Index No. 40000/1988) on the issue of permitting substituted service of process [5] upon Jenkins by way of service upon its insurer Liberty Mutual, in respect of this action, the Khan and Cunningham actions, and any future NYCAL action in which Jenkins is named as a defendant; and (3) for an order directing the Clerk of the Court to enter a default judgment in plaintiffs' favor against Jenkins in the Antle, Valensi, and Lantenschuetz actions for failing to timely answer or otherwise move in those cases.

Defendant Jenkins Bros., which manufactured valves that are alleged to have contained asbestos, was incorporated under the laws of New Jersey in 1907. In or about 1944 it became authorized to do business in New York as a foreign corporation by filing with the New York Secretary of State. Jenkins surrendered its authority to do business in New York in 1985. In January of 1989 Jenkins filed a voluntary petition in bankruptcy for reorganization pursuant to Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Pennsylvania. (See 11 USC § 1101, et seq.). Jenkins' petition was converted to a Chapter 7 liquidation proceeding (See 11 USC § 701, et seq.) in October of 1989. The entire proceeding was closed in 1997. Jenkins was involuntarily dissolved by the New Jersey Department of State in 2004.

It is undisputed that Liberty Mutual has standing to bring this motion on behalf of Jenkins insofar as the Actions seek to collect against insurance policies issued to Jenkins by Liberty Mutual in the 1970's. [6] As set forth in Saratoga Cnty. Chamber of Commerce, Inc. v Pataki, 100 N.Y.2d 801, 812 (2003), "New York courts have treated standing as a common-law concept, requiring that the litigant have something truly at stake in a genuine controversy." The insurance policies at issue require Liberty Mutual to defend and indemnify Jenkins for tortuous conduct committed by Jenkins prior to Jenkins' dissolution, including the time periods complained of in these Actions. [7]


I. Service of process in Antle, Valensi, and Lantenschuetz.

Plaintiffs' counsel [8] had unsuccessfully attempted to serve Jenkins with process at addresses in Connecticut, New York, and Pennsylvania. They were also unable to serve Jenkins through CT Corporation System, which had formerly acted as Jenkins' agent for service of process in New York.

Thereafter plaintiffs' counsel identified and located Jenkins' former Treasurer, Mr. Thomas Martin, and former registered agent for service of process in Connecticut, Mr. Michael Widland. Plaintiff alleges that pursuant to CPLR 311(a) process was served on Jenkins in the Antle, Valensi, and Lantenschuetz matters by personal service on Mr. Martin and that service of process was also effectuated on Jenkins in the Valensi matter by personal service on Mr. Widland. CPLR 311(a) permits service of process on a corporation by personal service on a corporate officer, including the treasurer. Fashion Page, Ltd. v Zurich Ins. Co., 50 N.Y.2d 265, 272 (1980). Such service fulfills the "statutory aim [of CPLR 311] since their positions are such as to lead to a just presumption that notice to them will be notice to the * * * corporation.'" Id. (quoting Tauza v Susquehanna Coal Co., 220 NY 259, 269 [1917]).

Liberty Mutual asserts that because Jenkins liquidated its assets approximately 16 years ago by way of the Chapter 7 bankruptcy proceeding [9] and was dissolved by proclamation of the New Jersey Secretary of State in 2004, there is no corporate entity which can be served. In support Liberty Mutual relies on a letter dated April 29, 2013 to the State of Connecticut Commercial Recording Division in which Mr. Widland resigned as an agent for service of process for Jenkins, noting that it had been out of business for almost 25 years. (Plaintiff's exhibit V). Likewise, the record indicates that Mr. Martin has declined to accept any further process, mailings, or default notices. [10] In the cases cited by the parties on this issue [11], the defendant corporation's were sued at most a few years after they had dissolved. Here, far more time had passed between Jenkins' dissolution and the filing of the complaint, and thus it is reasonable to question whether service on Jenkins' former officers would satisfy due process. "[T]he guiding principle must be one of notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.'" Raschel v Rish, et al., 69 N.Y.2d 694, 696 (1986) (quoting Mullane v Central Hanover Trust Co., 339 U.S. 306, 314 [1950]) In the circumstances of this case, the court will at this time hold in abeyance decision on the issue whether Jenkins was validly served in the Antle, Valensi, and/or Lantenschuetz actions by service on its former treasurer, Mr. Martin, and its former agent, Mr. Midland [12], and accordingly declines to hold Jenkins in default for failing to answer the complaints served on Messrs. Martin and Midland in those matters.

II. Joinder

" [A] motion seeking a joint trial pursuant to CPLR 602(a) rests within the sound discretion of the trial court.'" Alizio v Perpignano, 78 A.D.3d 1087, 1088 (2d Dept 2010) (quoting Glussi v Fortune Brands, 276 A.D.2d 586, 587 [2d Dept 2000]). [13] Generally, in order to join actions for trial, there must be a "plain identity between the issues involved in the two controversies." Vigo S.S. Corp. v Marship Corp. of Monrovia, 26 N.Y.2d 157, 161 (1970). "Consolidation or joint trials are favored by the courts in serving the interests of justice and judicial economy.'" Bruno ...

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