CYNTHIA L. CHAN, PLAINTIFF-RESPONDENT,
ONYX CAPITAL, LLC, DEFENDANT. SRP 2012-4, AS SUCCESSOR IN INTEREST TO DEFENDANT ONYX CAPITAL, LLC, APPELLANT.
RICHLAND & FALKOWSKI, PLLC, ASTORIA (DANIEL H. RICHLAND
OF COUNSEL), FOR APPELLANT.
WESTERN NEW YORK LAW CENTER, INC., BUFFALO (KEISHA A.
WILLIAMS OF COUNSEL), FOR PLAINTIFF-RESPONDENT.
PRESENT: CENTRA, J.P., PERADOTTO, LINDLEY, NEMOYER, AND
from an order of the Supreme Court, Erie County (Henry J.
Nowak, Jr., J.), entered November 1, 2016. The order, insofar
as appealed from, denied the motion of SRP 2012-4, LLC, as
successor in interest to defendant Onyx Capital, LLC, to,
inter alia, vacate the default judgment and to dismiss the
hereby ORDERED that the order insofar as appealed from is
unanimously reversed on the law without costs, the motion is
granted, the order dated September 23, 2013 is vacated, and
the complaint is dismissed in accordance with the following
memorandum: Plaintiff commenced this action pursuant to RPAPL
1501 (4) seeking to discharge a mortgage on her property on
the ground that the applicable six-year statute of
limitations for a foreclosure action had passed. Defendant
failed to answer the complaint or otherwise appear, and
Supreme Court granted plaintiff's motion for a default
judgment. SRP 2012-4, LLC (SRP), as successor in interest to
defendant, moved pursuant to, inter alia, CPLR 5015 (a) (4)
to vacate the default judgment, and pursuant to CPLR 306-b
and 3211 (a) (8) to dismiss the complaint. The court denied
the motion, and we now reverse the order insofar as appealed
agree with SRP that plaintiff failed to comply strictly with
Limited Liability Company Law § 304 and thus the court
did not have jurisdiction over defendant. Pursuant to that
statute, "[f]irst, service upon the unauthorized foreign
limited liability company may be made by personal delivery of
the summons and complaint, with the appropriate fee, to the
Secretary of State (see Limited Liability Company
Law § 304 [b])" (Global Liberty Ins. Co. v
Surgery Ctr. of Oradell, LLC, 153 A.D.3d 606, 606 [2d
Dept 2017]). That was done by plaintiff in this case.
"Second, in order for the personal delivery to the
Secretary of State to be sufficient, ' the plaintiff must
also give the defendant direct notice of its delivery of the
process to the Secretary of State, along with a copy of the
process" (id.; see § 304 [c]).
The direct notice may be given to the defendant personally
(see § 304 [c] ). That was attempted by
plaintiff, but the process server was unable to make personal
service inasmuch as the property was "unoccupied."
In the alternative, "[t]he direct notice may be sent to
the defendant by registered mail, return receipt
requested" (Global Liberty Ins. Co., 153 A.D.3d
at 606; see § 304 [c] ). That was attempted
by plaintiff in this case, but the mail was returned to
plaintiff as undeliverable.
final step, plaintiff must file an affidavit of compliance
(see Limited Liability Company Law § 304 [e]).
Where, as here, "a copy of the process is mailed in
accordance with this section, there shall be filed with the
affidavit of compliance either the return receipt signed by
such foreign limited liability corporation or other proof of
delivery or, if acceptance was refused by it, the original
envelope with a notation by the postal authorities that
acceptance was refused" (id.).
well settled that "[s]trict compliance with Limited
Liability Company Law § 304 is required, including as to
the filing of an affidavit of compliance' "
(Global Liberty Ins. Co., 153 A.D.3d at 607; see
Interboro Ins. Co. v Tahir, 129 A.D.3d 1687, 1689 [4th
Dept 2015]). The Court of Appeals in Flick v
Stewart-Warner Corp. (76 N.Y.2d 50');">76 N.Y.2d 50 , rearg
denied 76 N.Y.2d 846');">76 N.Y.2d 846 ) analyzed Business
Corporation Law § 307, which is substantively identical
to Limited Liability Company Law § 304. The Court
explained that "the statute contains procedures
calculated to assure that the foreign corporation, in fact,
receives a copy of the process" (Flick, 76
N.Y.2d at 56). The Court held that "[t]he proof called
for in the affidavit of compliance is that the required
actual notice has been given either by personal service or by
registered mail... These are not mere procedural
technicalities but measures designed to satisfy due process
requirements of actual notice" (id.).
case, as outlined above, plaintiff failed to comply with step
two of Limited Liability Company Law § 304. We reject
plaintiff's contention that nothing more was required of
her after the registered mail was returned as undeliverable.
Inasmuch as plaintiff failed to comply with step two, she
necessarily also failed to comply with step three, which
would show that a party complied with the service
requirements of section 304. Initially, we note that
plaintiff filed an affidavit of service showing personal
service upon the Secretary of State and a notation that
service was made upon defendant by registered mail, return
receipt requested, but she did not file an affidavit of
compliance (see Flannery v General Motors Corp., 86
N.Y.2d 771, 773 ; VanNorden v Mann Edge Tool
Co., 77 A.D.3d 1157, 1159 [3d Dept 2010]; Smolen v
Cosco, Inc., 207 A.D.2d 441, 441-442 [2d Dept 1994]).
Moreover, because plaintiff did not comply with step two, she
was unable to file a return receipt signed by defendant
"or other official proof of delivery" (§ 304
[e]; see Lansdowne Fin. Servs. v Binladen
Telecommunications Co., 95 A.D.2d 711, 712 [1st Dept
1983]). Purportedly attached to the affidavit of service
filed by plaintiff was a copy of the envelope mailed to
defendant by registered mail and returned to plaintiff as
undeliverable. Rather than showing proof of delivery,
plaintiff showed just the opposite, i.e., that the process
was not delivered to defendant. We therefore conclude that
the motion to vacate the ...