KENNETH L. CAPOLINO et al., Respondents,
LELA GOREN, Appellant.
Calendar Date: October 17, 2017
Goldberg Weprin Finkel Goldstein LLP, New York City (Matthew
Hearle of counsel), for appellant.
Office of Teresi & Little, PLLC, Albany (Sarah M. Engster
of counsel), for respondents.
Before: Garry, J.P., Devine, Mulvey, Aarons and Rumsey, JJ.
MEMORANDUM AND ORDER
from an order of the Supreme Court (McNally Jr., J.), entered
October 14, 2016 in Albany County, which, among other things,
denied defendant's cross motion to, among other things,
change venue from Albany County to Westchester County.
April 2012, plaintiffs agreed to sell real property in the
City of Yonkers, Westchester County to Glenwood POH, LLC,
with Glenwood granting a purchase money mortgage to
plaintiffs and agreeing to provide security for any capital
gains income tax liability incurred by them. Glenwood
subsequently entered into a separate agreement in which it
committed to providing confessions of judgment that would
serve as security for plaintiffs' potential capital gains
income tax liability. For reasons that are not made clear in
either agreement, defendant, a member of Glenwood, personally
executed two confessions of judgment in December 2012, one in
favor of plaintiff Kenneth L. Capolino for $100, 800 and the
other in favor of plaintiff Glenplace Equities for $643, 200.
then transferred title and its obligations under the mortgage
to another limited liability company of which defendant was
the sole member. In March 2016, after defendant rebuffed a
demand to reimburse plaintiffs for certain income taxes,
plaintiffs commenced this action by filing a summons and
motion for summary judgment in lieu of complaint in Albany
County (see CPLR 3213). Plaintiffs sought judgment
against defendant for the amounts set forth in the
confessions of judgment that she had provided. Moreover,
relying upon a provision in the purchase and sale agreement,
plaintiffs served defendant with the summons and motion
papers by mail.
served a demand to change venue to Westchester County. When
plaintiffs opposed that demand, defendant cross-moved for
dismissal due to a lack of personal jurisdiction or,
alternatively, for a change of venue. Supreme Court denied
the cross motion in its entirety and, discerning material
questions of fact, declined to grant summary judgment and
directed the parties to serve formal pleadings. Defendant,
focusing solely upon the denial of her cross motion, appeals.
in arguing that they properly venued this action in Albany
County and served defendant by mail, rely upon provisions in
the purchase and sale agreement between plaintiffs and
Glenwood. Defendant and the limited liability companies of
which she is a member "are distinct entities, "
however, and the former is not individually bound by the
contractual commitments of the latter (Angelino v Francis
J. Angelino, D.D.S., P.C., 83 A.D.3d 1186, 1188 ;
see Panasuk v Viola Park Realty, LLC, 41 A.D.3d 804,
805 ; see also Limited Liability Company Law
§§ 609 [a]; 610). Nothing in the purchase and sale
agreement binds defendant to its terms, instead making clear
that no "shareholder, director, officer of or principal
or agent of" Glenwood will "have any personal
liability, directly or indirectly, under or in connection
with" either the agreement or any amendments to it.
Contrary to plaintiffs' suggestion, defendant did not
later agree to be so bound in an extension agreement that she
executed in her capacity as a member of Glenwood that left
the relevant provisions of the purchase and sale agreement
"in full force and effect." As a result, plaintiffs
may not invoke those contractual provisions in this action
the inapplicability of those contractual provisions,
plaintiffs' effort to serve defendant by mail was
deficient in that service "under CPLR 3213 is subject to
the rules governing service of the summons generally"
(David D. Siegel, Practice Commentaries, McKinney's Cons
Laws of NY, Book 7B, CPLR 3213:9; see e.g. Calvert Fire
Ins. Co. v Special Risk Covers, 125 A.D.2d 243, 244
). The mailing nevertheless placed defendant on notice
of the pending motion for summary judgment in lieu of
complaint, and she responded with a cross motion that opposed
the motion on various grounds. Plaintiffs then arranged for
proper, albeit untimely, service of defendant pursuant to
CPLR 308 (2), and advised that they were amenable to any
further adjournment of the return date "as defendant and
[Supreme] Court may find proper."  Accordingly, while a
wholesale failure to timely serve defendant with the
initiatory papers constitutes "a fatal jurisdictional
defect" (Bhanti v Jha, 140 A.D.3d 685, 686
; see CPLR 320 [a]; 3213; Segway of N.Y.,
Inc. v Udit Group, Inc., 120 A.D.3d 789, 791 ),
defendant was placed on notice, then submitted a cross motion
that raised various objections and included substantive
opposition before being properly served. In light of these
peculiar circumstances, as well as the absence of any
prejudice flowing from plaintiffs' missteps, we are
persuaded that the untimeliness of the proper service could
be and rightly was overlooked (see CPLR 2001, 2004;
A & J Concrete Corp. v Arker, 54 N.Y.2d 870, 872
; compare Segway of N.Y., Inc. v Udit Group,
Inc., 120 A.D.3d at 792 [CPLR 2001 inapplicable where
defects in service and in motion papers so "frustrat[ed]
the core principles of notice to the defendants" that
personal jurisdiction was not acquired over them]).
additionally contends that she was entitled to a change of
venue as a matter of right, asserting that Albany County was
improper because neither she nor plaintiffs live or do
business there. Plaintiffs relied upon provisions in the
purchase and sale agreement between them and Glenwood for
their choice of venue (see CPLR 501) but, as noted
above, those provisions have no applicability in this action
against defendant. Venue instead lies "in the county in
which one of the parties resided when [the action] was
commenced... or, if none of the parties then resided in the
state, in any county designated by the plaintiff" (CPLR
503 [a]). Plaintiffs, an individual and general partnership,
acknowledged in their motion papers that they live and
maintain their office in Westchester County (see
CPLR 503 [a], [d]). Defendant resides in New York County.
Consequently, defendant demonstrated that Albany County was
"not a proper county" for venue, and that part of
her cross motion seeking a change of venue to Westchester
County should have been granted (CPLR 510 ; see
CPLR 511 [a]; Valley Psychological, P.C. v Government
Empls. Ins. Co., 95 A.D.3d 1546, 1547-1548 ).
J.P., Mulvey, Aarons and Rumsey, JJ., concur.
that the order is modified, on the law, without costs, by
reversing so much thereof as denied that part of
defendant's cross motion seeking a change of venue; cross
motion granted to said extent and venue changed from ...