This is more of a heads-up rather than a lesson, a way to alert mortgage servicers to persistent problems with process service which have significant potential to slow-up foreclosure actions. The new case which makes the point [County of Nassau v. Letosky, 34 A.D.3d 414, 824 N.Y.S.2d 153 (2d Dept. 2006)] happens not to be a foreclosure case, but the concept is the same.
Aside from the nightmare of service by publication (we have done alerts on that in the past) there are three ways to serve a defendant. (This is for lawyers to worry about, but it helps to have a sense of it.) One is in-hand delivery, that is actually finding the person at home (or at work) and putting the papers in his or her hand. A second method is to leave process with a person of suitable age and discretion (again at the home or the place of business), followed by a mailing. Finally, there is what is known in common parlance as “nail-and-mail”, which is affixing the papers to the door of the residence, also followed by a mailing to that person.
The nail-and-mail method presents the problem that it is easier for a person to say the papers were never “affixed” and then it becomes a question of who the court wants to believe: the prospective defendant or the process server. Also, this variety of service is only available where the first two methods cannot be made with what is called “due diligence”, a concept which must by law be strictly observed in New York.
In the noted case, the attempts to serve the defendant at her home failed the due diligence requirement. Two of the three attempts were made on weekdays when it could reasonably be assumed that the defendant was either working or in transit to work and there was no demonstration that the process server made any attempt to locate the defendant at her business address to serve her there.
While it was true that the defendant did not actually deny receipt of the summons and complaint, the requirements for service had not been met because of the lack of due diligence. And here is the real threat – the court ruled that it was irrelevant that defendant may actually have received the documents where the requirements of service were not fulfilled.
In the end, the defendant’s motion to dismiss the complaint was granted because of lack of personal jurisdiction, that is, improper service.
This is scary and it does happen in foreclosure cases. What can be done? From the servicer’s viewpoint, making sure that counsel has all the possible information available, including a business address, can be the difference in success or failure. Counsel’s office has a considerable burden too in examining the affidavits of service of the process servers trying to determine in each and every instance whether statutes were complied with – a weighty task indeed.
Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2017), is a partner with Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. in Garden City, New York. He is also a member of the USFN, The American College of Real Estate Lawyers, The American College of Mortgage Attorneys, an adviser to the New York Times on foreclosure issues and writes a regular servicing column for the New York Law Journal. He is AV rated by Martindale-Hubbell, his biography appears in Who’s Who In American Law and he has been for years listed in Best Lawyers In America and New York Super Lawyers.