Summary
The Appellate Division, Second Department, reversed an order granting Wells Fargo Bank an extension under CPLR 306-b to serve Mark Barasch with the summons and complaint in a mortgage foreclosure action. The court held that Wells Fargo failed to establish good cause or entitlement to an extension in the interest of justice, citing its substantial delay after receiving notice that service was being challenged and after service was determined to be improper.
Topics
Practice areas
Questions Presented
- Whether the plaintiff could seek a CPLR 306-b extension of time to serve process while the action remained pending and no judgment dismissing the complaint had been entered.
- Whether the plaintiff established good cause for an extension of time to serve Mark Barasch.
- Whether the plaintiff was entitled to an extension of time to serve Mark Barasch in the interest of justice.
Holdings
- Because no judgment had been entered dismissing the complaint, the action remained pending when Wells Fargo moved under CPLR 306-b, so the plaintiff was not categorically foreclosed from seeking an extension of time to serve.
- Wells Fargo failed to demonstrate good cause for an extension of time to serve Mark Barasch because it did not show reasonable diligence in attempting service.
- Wells Fargo was not entitled to an extension of time to serve Mark Barasch in the interest of justice because of its substantial and unexplained delays after learning that service was challenged and after service had been found improper.
Key quotations
“"Pursuant to CPLR 306-b, a court may, in the exercise of discretion, grant a motion for an extension of time to effect service for 'good cause shown' or 'in the interest of justice'"” ([*1])
“"To establish good cause, a plaintiff must demonstrate reasonable diligence in attempting service"” ([*1])
“"the court may consider diligence, or lack thereof, along with any other relevant factor in making its determination, including expiration of the Statute of Limitations, the meritorious nature of the cause of action, the length of delay in service, the promptness of a plaintiff's request for the extension of time, and prejudice to [the] defendant"” ([*1])
Factual background
Wells Fargo commenced an action to foreclose a consolidated mortgage on property in Pound Ridge in July 2015. Although affidavits stated that Mark and Ellen Barasch were served at the property under CPLR 308(2), the defendants challenged service, and Supreme Court found after a hearing that service was invalid. Wells Fargo waited until December 2021—more than four years after the service determination and more than six years after learning that service was challenged—to seek an extension of time to serve Mark Barasch.
Procedural history
Wells Fargo commenced the foreclosure action in July 2015 and purportedly served Mark and Ellen Barasch under CPLR 308(2). The defendants challenged personal jurisdiction and service. After a hearing, Supreme Court dismissed the complaint against them for lack of personal jurisdiction, and the Appellate Division affirmed that dismissal in 2020. Wells Fargo moved in December 2021 for an extension of time to serve under CPLR 306-b; Supreme Court granted the motion, and Mark Barasch appealed.