Opinion
700297/10.
Decided June 17, 2011.
The following papers numbered 1 to 4 read on this motion by plaintiff for an order by default judgment in favor of plaintiff and against defendants ELVIRA GRIMALDI and DENISE M. TORRES, jointly and severally, in the amount of 110,750.00 with interest from May 31, 2007, plus cost and disbursement as taxed by the Clerk.
PAPERS NUMBERED Notice of Motion-Affidavits-Exhibits ................... 1 — 4Upon the foregoing papers, it is hereby ordered that the motion is resolved as follows:
In this action, plaintiff Windsor Park Nursing Home, Inc. ("Windsor Park," or, the "Nursing Home") moves for default judgment against defendants Elvira Grimaldi ("Grimaldi") and Denise Torres ("Torres"), pursuant to CPLR 3215. Windsor Park seeks to recover payment from defendants for the skilled nursing services it provided to Grimaldi. Windsor Park alleges that because Grimaldi and Torres transferred or converted Grimaldi's assets, Medicaid denied coverage for Windsor Park's nursing services, resulting in a remaining balance of $110,750.00. Grimaldi and Torres, Windsor Park alleges, are thus due and owing that amount. As fully set forth below, this motion for a default judgment is denied and the complaint is dismissed as the court lacks personal jurisdiction over the defendants.
Background
Windsor Park alleges that Grimaldi became a resident of the Nursing Home on March 15, 2006. (Verified Complaint ¶ 7, Sep. 1, 2010.) Plaintiff asserts that in signing an Admission Agreement ("the Agreement") Grimaldi "represented that she had the resources, insurance coverage and/or was eligible for government benefits (including Medicaid and/or Medicare)" to pay for services received, and that "she would ensure [these resources] would be used to pay [the plaintiff]." ( Id. at ¶ 8.) Windsor Park states it relied on these representations when choosing to admit Grimaldi into its facility. ( Id. at ¶ 11.) However, Windsor Park asserts that Grimaldi has since become insolvent, Medicaid has denied coverage for the nursing home services, and as a result, it has suffered $110,750.000 plus interest in damages as of May 31, 2007. ( Id. at ¶¶ 19, 21.) Windsor Park claims that Grimaldi purposely achieved insolvent status pursuant to the Debtor and Creditor law by "convey[ing] and/or transfer[ing] assets and/or income" to her granddaughter Torres. ( Id. at ¶¶ 17-18, 20.) It supports this claim by the New York City Human Resources Administration (HRA), Medical Assistance Program's determination that Grimaldi's transfer of real property located at 93-51 202nd Street, Jamaica, New York to Torres was fraudulent. ( Id. at ¶ 19.) Due to this finding, HRA, which manages Medicaid, allegedly denied full coverage for Windsor Park's services to Grimaldi. ( Id.) Asserting that Grimaldi breached the Agreement contract, was unjustly enriched, and fraudulently conveyed assets, which Torres fraudulently received, Windsor Park alleges that the defendants owe it the damages suffered from the unpaid services it rendered to Grimaldi. Windsor Park moves this court to grant an order of default judgment in its favor and against the defendants, jointly and severally, for this amount. (Affidavit in Support ¶ 3, Feb. 5, 2011.)
Discussion
While CPLR 3215 provides a vehicle for an accelerated judgment, this short cut should not be a short cut on justice, particularly in light of the preclusive effect of such a judgment. ( Tantillo v. Giglio, 156 AD2d 664 [2nd Dept 1989].) CPLR 3215 requires proof (1) that the summons with a complaint or notice has been served; (2) of the claim including the amount of the claim; and (3) of the default. (CPLR 3215 (f), (g).) As Windsor Park fails to fulfill these elements, its motion fails.
I. Deficient Service of Process
Windsor Park's motion for default judgment is denied because its service of process on Torres and Grimaldi was deficient and personal jurisdiction was not acquired over the defendants. CPLR 3215(g) requires, albeit implicitly, that the default or CPLR 3215 notice be served after the service is complete. While in its motion Windsor Park submits papers served on Torres and Grimaldi, these papers were incorrectly served.
A. Defendant Torres
It would be precipitous to issue a default judgment against Torres, as Torres did not receive proper notice of the money allegedly owed to Windsor Park. Pursuant to CPLR 313, process may be served without the state if it is done "in the same manner as service made within the state." CPLR 308(2) states that personal service may be made in the state by delivering the summons "to a person of suitable age and discretion," and by mailing copies of the Summons and Complaint to the party within 20 days from the substituted service.
Windsor Park submits an affidavit of service upon Torres, allegedly a Texas resident, which states that substituted service was made by serving a Darrell Vaughn, "as suitable age and occupant" at 5810 Cypress Wick Circle, Pring, Texas on October 16, 2010. However, there is no indication that Windsor Park subsequently mailed the summons to Torres, with or without the complaint, in accordance with CPLR §§ 308 and 313.
This court makes no finding as to any other aspect of service upon Torres.
Windsor Park annexed, as Exhibit D, an "Affidavit of Additional Mailing under CPLR § 3215," (the "Affidavit") providing that "an additional copy of the summons and complaint" was mailed to Torres on October 25, 2010, pursuant to CPLR 3215 (g). However, the Affidavit cannot substitute the notice Windsor Park was required to provide under CPLR 308 and 313. Section 3215 (g) (1) (I) requires a plaintiff seeking "default judgment based upon nonappearance," in an action alleging "nonpayment of a contractual obligation," to provide the defendant with " additional notice," 20 days prior to motioning for a judgment. (Emphasis added.) "Notice under CPLR § 3215(g)(3)(I) is not a substitute for proper service." ( Orix Fin. Services, Inc. v Baker, 1 Misc 3d 288, 292 [Sup Ct 2003].) Since service on Torres is not complete, the court does not have jurisdiction over Torres, and thus cannot issue a default judgment.
B. Defendant Grimaldi
The court finds that Windsor Park did not serve Grimaldi notice because (1) in serving a Windsor Park employee on behalf of Grimaldi, there exists an inherent conflict of interests, and (2) the plaintiff has failed to inform the court of Gimaldi's competency to represent herself.
Due process requires "that process be served by a legally approved method that, viewed objectively, is reasonably calculated to make the defendant aware of the proceedings even if the summons is never actually received." ( City of New York v Chem. Bank, 122 Misc 2d 104, 106 [Sup Ct 1983] citing Dobkin v Chapman, 21 NY2d 490, 502.) Nevertheless, "[g]ood faith is implicit" to this requirement; "[i]f a plaintiff knows, or should know, that service according to the letter of the statute will not afford notice, then, by definition, it is not reasonably calculated to afford notice, and is constitutionally infirm." ( Chemical Bank, 122 Misc 2d at 107.)
The method Windsor Park chose to serve process upon Grimaldi might seem reasonable to afford Grimaldi notice if narrowly considered. Yet, in light of Grimaldi's particular situation, as a nursing home resident, dependent upon others for care, and as a resident of Windsor Park's nursing home, her adversary in this suit, its reasonableness is less certain. As Grimaldi's nursing home and caretaker, Windsor Park was in a position such that it should have understood that its method of service was unlikely to provide Grimaldi notice.
1. Conflict of Interest
With respect to the purported service of process upon Grimaldi, a Windsor Park resident, the summons and verified complaint were served upon the administrative manager of Windsor Park (the "Manager") and subsequently, the papers were mailed to Grimaldi "c/o of Windsor Park Nursing Home", the plaintiff herein. Under CPLR 308, personal service may be effected upon someone other than the named party, if recipient is "a person of suitable age and discretion."
A person is generally considered of suitable age and discretion if "the nature of his/her relationship to the person to be served makes it more likely than not that they will deliver process to the named party." ( Bakht v Akhtar , 18 Misc 3d 78 , 79 [App Term 2007] citing 50 Ct. St. Assoc. v Mendelson and Mendelson, 151 Misc 2d 87, 91 [Civ Ct 1991].) Furthermore, "[c]ourts search for indications that the person served can be counted on to inform the named party of the proceeding." ( Id.) The Appellate Division Second Department has ruled that a plaintiff who shares a residence with a defendant "was not a person of suitable age and discretion, within the meaning of CPLR 308 (2), to accept service of process on behalf of the [defendant]." ( Weidemann v. Keith, 127 AD2d 831, 831 [2nd Dept 1987].) Therefore, it is doubtful that the manager, a Windsor Park employee, is of suitable and age of discretion, responsible for giving the summons and complaint to Grimaldi; an inherent conflict of interest exists when a party, essentially, serves itself.
There is a thin veneer of statutory regularity. Windsor Park did not directly serve the summons upon the Manager. Instead, it hired Luis Crespo, on behalf of Elite Process Servers, Inc., to serve notice. Crespo avers he is not a party to this action, and that he served the Manager as a person he believed to be of suitable age and discretion. Nevertheless, it is clear that mere self interest, adverse to those of the defendant, is enough to deem service upon said recipient as invalid. ( Community School Dist. No. 13 v Goodman, 127 AD2d 837 [2d Dept 1987].)
In Goodman, the court found that the superintendent and chief executive of a school district was not of suitable age and discretion, to accept, on behalf of the respondent, service of process related to a legal dispute between the respondent and the school district. While the superintendent was not a named party to the suit, his interests were adverse to the respondent's interests. As in Goodman, a reasonable person would believe that the Manger, in an administrative position at Windsor Park, has a strong interest in the outcome of this case, which is adverse to Grimaldi's interests.
Because of this apparent conflict, the Manager was not of suitable discretion to accept service on behalf of Grimaldi, and thus, Grimaldi did not receive proper notice such that a CPLR 3215 judgment would be applicable.
2. Incapacity
The court takes judicial notice that residents of nursing homes or long-term care facilities are fragile, and often impaired. While Windsor Park has submitted no information in regard to Grimaldi's mental or physical condition, courts have recognized their duty to protect "a litigant actually incompetent but not yet judicially declared as such." ( In re Willie L.C., 65 AD3d 683, 685 [2d Dept 2009] citing Shad v Shad, 167 AD2d 532, 533 [2d Dept 1990].) Moreover, a default judgment is invalid and ineffective, and will be vacated if the court determines that at the time of the default, the defendant lacked the capacity to defend her interests, and she was not appointed a guardian ad litem. (CPLR § 1203; Mohrmann v Lynch-Mohrmann , 24 AD3d 735 , 737 [2d Dept 2005].)
To provide notice to a defendant "judicially declared to be incompetent to manage his affairs and for whom a committee has been appointed," CPLR 309 requires that personal service "be made on both the defendant and the judicially-appointed representative." (Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C309:2.)
Because Grimaldi is a nursing home patient, this court has reason to consider the possibility that she lacks the capacity to represent herself. It would be in Windsor Park's best interests to inform the court of Grimaldi's capacity to represent her interests in this matter, since, as Grimaldi's nursing home, it is in a unique position to report on this matter. Accordingly, since the court has a moral and legal obligation to vacate any judgment made if it subsequently learns that she was incompetent at the time of the default, issuing a default judgment without information on Grimaldi's capacity to represent her interests would be a hasty and inefficient use of judicial resources.
Even if the plaintiff achieved jurisdiction, the court could not grant default judgment because the papers upon which it demands default judgment are deficient; the papers fail to provide proof of the facts constituting the claim against the defendants as required by CPLR 3215 (f). Windsor Park has not proven that it informed Grimaldi and Torres of the amount allegedly owed. To support its contention that the defendants owe $110,750.000, Windsor Park attached a Patient Ledger itemizing the charges Grimaldi allegedly owes. However, the plaintiff has not demonstrated that it forwarded a bill for these charges to either defendant in this action. Further, with respect to Torres, the plaintiff has provided no documentary evidence to link her to Grimaldi, except for statements based "on information and relief" that she absconded with proceeds from the sale of Grimaldi's house.
Without proof that the plaintiff previously provided the defendants with a bill, or evidence establishing a sufficient relationship between Torres and Grimaldi such that it is appropriate to name Torres as a defendant, Windsor Park has not submitted the proof required under CPLR 3215 (f). ( HSBC Bank USA, N.A. v Betts , 67 AD3d 735 , 736 [2d Dept 2009]; Peniston v Epstein , 10 AD3d 450 [2d Dept 2004].) Particularly in light of the preclusive effect of default judgment, it would be unjust to enter judgment against Grimaldi and Torres for failing to pay a bill they never received, or against a defendant, Torres, whose relationship to this suit is unclear. Consequently, if the court had jurisdiction over the defendants, as Windsor Park's papers fail to meet the requirements for a default judgment, the motion would have been denied.
Conclusion
As plaintiff failed to provide proof of proper service pursuant to CPLR §§ 308, 313 the court is without personal jurisdiction over either defendant and the complaint must be dismissed. ( See Fleisher v. Kaba , 78 AD3d 1118 , 1120 [2nd Dept 2010]; Klein v. Educational Loan Servicing, LLC , 71 AD3d 957 , 958 [2nd Dept 2010]; Jakco Inc. v. Fiore, 285 AD2d 582 [2nd Dept 2001].)
Thus, for the reasons stated herein, the complaint is dismissed and Windsor Park's motion for default judgment is denied as moot.