Even if a Party’s Counsel in Another Action Agrees to Accept Service, Service is not Effective Without Evidence that the Defendant Gave His Counsel Permission to Accept Service

On September 15, 2023, Justice Cohen of the New York County Commercial Division issued a decision in Credit Europe Bank (Dubai) Ltd. v. Shetty, 2023 NY Slip Op. 33204(U), holding that even if a party’s counsel in another action agrees to accept service, service is not effective without evidence that the defendant gave his counsel permission to accept service, explaining:

Service on an attorney is proper only where the attorney has appeared in the action in which service is claimed to have been admitted. Absent a formal appearance by counsel of record, serving process on a party’s attorney is not sufficient to establish personal jurisdiction absent proof of the attorney’s authorization. As previously determined by the Court, summary judgment in lieu of complaint should be denied where apparent counsel for the defendant admits service but fails to provide any proof of their authorization to accept it. The Court’s prior order was without prejudice to renewal and properly serving Shetty. In an effort to demonstrate proper service of its second motion for summary judgment in lieu of a complaint in this action, CEBD submits an affirmation of service of its counsel annexed to which is an affirmation of Benjamin Bianco, Esq., whose firm represents Shetty in another action. Mr. Bianco states that he is authorized to accept service in this action but does not attach any authorization from Shetty – the person to be served – or other evidence of his authority. While the Court does not have reason to question the truthfulness of Mr. Bianco’s statement, it remains insufficient to establish personal jurisdiction over Shetty.

CEBD cites two cases to support its contention that it has established proper service, Contrary to CEBD’s argument, Annaly is inapposite because in that case the Guaranty expressly designated counsel as an agent for service on behalf of the Guarantor and there is no similar designation here. Garces is inapposite because service was accepted by an attorney who had recorded an appearance in the matter and because the relevant defendant had actual knowledge that counsel was acting on its behalf in the relevant matter.

Neither case relied on by CEBD is sufficient to establish proper service on and personal jurisdiction over Shetty. Proper service is necessary to establish personal jurisdiction prior to the entry of a judgment. Absent proof that a defendant has designated his or her attorney as an agent for the acceptance of process, an attorney lacks the authority to accept service on the defendant’s behalf. As determined in another case denying summary judgment in lieu of a complaint, there exists no authority where service of process is deemed sufficient to satisfy a defendants’ rights to due process when no effort is made to serve the summons on the defendant, and plaintiff does not attempt service specified under the CPLR or seek court approval of service by other means.

(Internal quotations and citations omitted).

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