On April 17, 2024, Justice Chan of the New York County Commercial Division issued a decision in CLP Luminex Holdings, LLC v. Global Consumer Acquisition LLC, 2024 NY Slip Op. 31395(U), holding that the CPLR does not allow for service on agents for service of process appointed by another state’s statute, explaining:
The CPLR dictates methods of proper service within New York State. For people and entities served outside New York, like Pai and Ajila in India, service is proper if they are subject to New York’s long·arm jurisdiction and served in the same manner as service is made within the state. The statute thus has both the intention and effect of removing state lines, and the plaintiff is to use the service methodologies of CPLR 308, 309, 310, 311, and 312-a, etc. wherever the defendant (or person authorized to accept service on defendant’s behalf may be found.
The relevant statute here is CPLR 308, which dictates how to serve natural persons like Pai and Ajila. The statute sets out five methods of service, only one of which is relevant here: (3) by delivering the summons within or without, CPLR 313 the state to the agent for service of the person to be served as designated under CPLR rule 318. Rule 318 in turn requires agents to be designated in a writing, executed and acknowledged in the same manner as a deed, with the consent of the agent endorsed thereon. The writing must then be filed in the office of the clerk of the county in which the principal to be served resides or has its principal office.
Plaintiffs claim that under Breer v Sears, Roebuck and Co. (184 Misc 2d 916, 926 [Sup Ct, Bronx County 2000]), CPLR 313 leads us to a two-part inquiry: first, whether the defendants were properly served under the law of the state where the summons was delivered; and second, whether such service was consistent with New York law .As an initial matter, this two-prong Breers analysis arguably does not apply as Breers involved a plaintiff’s service on a corporate defendant, not an individual. Service on corporations is covered by CPLR 311, which allows a much broader range of acceptable service than CPLR 308.
Nevertheless, even assuming the analysis set out by Breers applies, plaintiffs’ argument still fails on the second prong-compliance with New York law. Plaintiffs argue that they could properly serve Pai and Ajila through GACQ ‘s Delaware registered agent because New York allows service on agents appointed by contract or statute, and thus, agents designated by Delaware Code § 3114[a] are proper targets for service. In other words, any agent designated pursuant to another state’s laws is a proper service target for individual defendants in New York court.But nothing in the actual text of the service statutes supports this argument. Under CPLR 313, service outside New York must comply with New York’s service statutes. Agents of individuals must be served in compliance with CPLR 308 [3], which in turn requires defendants to appoint the agent through the process set out in Rule 318. Finally, Rule 318 lays out an appointment process that requires putting the agent designation in writing with the agent’s consent and then filing the writing in a specific county. Nowhere do these statutes say that plaintiffs may serve an agent designated solely by operation of another state’s law.
Plaintiffs counter that despite the text of CPLR 308 [3], Rule 318 is now entirely optional under the case law, and instead, they can serve any agent appointed by contract or statute, even statutes of a foreign jurisdictions. Plaintiffs argue, in particular, that under the Breers case, service upon an agent designated by appointment or by law in a foreign jurisdiction is valid, provided that such service is accomplished in the same manner as service within New York State.As mentioned earlier, Breers is inapposite because it relates to service on a corporation pursuant to a different statute–CPLR 311. Moreover, the language that plaintiffs focus on-designated by appointment or by law-was not an invention by the Breers court but a direct quote from CPLR 311. In contrast, there is no such comparable provision in CPLR 308 which would allow such service to be deemed personal service upon a natural person.
However, plaintiffs are at least partly correct that Rule 318 is no longer the exclusive way to appoint an agent under New York law. While some courts have required strict compliance with Rule 318, a different line of cases holds that parties to a contract include a contract term to select agents to accept service for issues arising from the contract without following Rule 318’s procedures. Some of those cases additionally require that the contractually-selected agent promptly accept the summons or process, and promptly transmit it or notice thereof to the principal.
Plaintiffs claim that Szukhent also extends to agents appointed by other states’ statutes, but none of the cases they cite, and addressed here, stand for that proposition. Szukhent and Kielbasa deal with agents appointed by contract. Breers, as already noted, involves service on a corporation. Morgenthau v Avian Resources Ltd, another case cited by plaintiffs, does not discuss agents of individuals at all, except insofar as the court expressly allowed alternative service on defendants’ lawyers pursuant to CPLR 308 [5].
Similarly, the court has not found a single case (a) extending Szukhent to agents appointed via foreign statutes or (b) discussing Delaware Code§ 3114 [a] in a New York case. Because there is no basis in New York law to allow service on Pai and Ajila via GACQ’s registered agent, service is improper. Given that plaintiffs failed to comply with the basics of service here, the defect is not technical under CPLR 2001. Accordingly, this court does not have personal jurisdiction over the individual defendants, Ajila and Pai; only Global Consumer Acquisition LLC remains as defendant in this action.
(Internal quotations and citations omitted).