OVERVIEW OF NEW YORK PRACTICE
PERSONAL JURISDICTION
To fully understand the issue of personal jurisdiction in New York, one must have an
appreciation of the American federal system. The national government is one of limited powers.
The various states – by history, custom, and the requirements of the United States Constitution –
retain significant powers, and independence from each other.
Therefore, the jurisdiction of the Courts of any state over residents of other states is
limited. The Supreme Court of the United States has held that a State court may only exercise
jurisdiction over a non-resident when that non-resident has at least “minimum contacts” with the
State. A State’s attempt to exercise jurisdiction, by “haling” (the term the Court often uses) into
its courts a non-resident with no contacts with the State, violates the Due Process clause of the
United States Constitution.
In New York, the provisions governing personal jurisdiction are CPLR 301 and
CPLR 302. CPLR 301 provides for “general” jurisdiction. When it has general jurisdiction
over a defendant, the Court may exercise jurisdiction no matter what the lawsuit is about, even if
the lawsuit has nothing to do with New York activities. Those subject to such “general”
jurisdiction are New York residents, New York corporations, foreign corporations authorized to
do business in New York, and New York limited partnerships. In addition, those persons,
corporations and partnerships who “regularly” and “continuously” do business here, to such an
extent that we can say that they are “present” in New York, are subject to “general” jurisdiction
here, even though they do not reside here.
CPLR 302 provides for “specific” or “long arm” jurisdiction. It permits jurisdiction over
non-resident defendants, even though they are not “present” in New York, when the claim in the
lawsuit arises directly out of certain specified New York conduct by the defendant. It is
frequently called a “single action” statute. That is, if the defendant engaged in an act, even if
only one act, that had a significant New York component, and the plaintiff’s claim arises from
that act, the Courts have jurisdiction over the defendant. CPLR 302(a)(1) provides for
jurisdiction over a non-resident when the plaintiff’s claim arises out of the defendant’s
transaction of business in New York, or from the defendant’s agreement, anywhere, to provide
goods or services in New York. CPLR 302(a)(2) provides for jurisdiction over a non-resident
who commits a tortious act in New York (for example, negligently driving a car here, causing an
accident). CPLR 302(a)(3) provides for jurisdiction over a non-resident who commits a tortious
act anywhere, which causes injury to a plaintiff in New York, provided that the defendant also
has other specified business connections with New York. Finally, CPLR 302(a)(4) provides for
jurisdiction over a non-resident when the plaintiff’s claim arises out of the defendant’s
ownership, use, or possession of real property in New York.
SERVICE OF PROCESS
In order for the Courts of New York to exercise personal jurisdiction over a defendant,
two separate standards must be met. First, there must be a “basis” for jurisdiction. The Court
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must be able to exercise power over the defendant because the defendant, or the defendant’s
conduct, meets the requirements of CPLR 301 or CPLR 302, discussed above. Second, the
defendant must be given adequate “notice.” That notice is provided by the proper service of the
jurisdictional paper, known as the summons. To be valid, the summons that is filed to
commence the action, and that is served upon the defendant, must be accompanied either by a
complaint, or by a “notice” setting forth the nature of the claim and the relief demanded.
The New York Court of Appeals has made clear that a summons, or “process,” is
properly served so long as the plaintiff complies with the service rules laid out in the applicable
statute, regardless whether the defendant in fact receives actual notice. Similarly, if the
defendant is not served in compliance with the statute, then jurisdiction is lacking even if the
defendant in fact received actual notice.
Service of process on an individual is governed by CPLR 308, which lists various
methods of service. CPLR 308(1) provides for “personal delivery,” which means actual,
physical, in-hand, delivery of the summons. CPLR 308(2) provides for what is generally known
as “leave and mail” service. Plaintiff may leave a copy of the summons with a person of
“suitable age and discretion” at the defendant’s actual residence, or the defendant’s actual place
of business, and also mail a copy to either the defendant’s actual residence or actual place of
business. CPLR 308(3) provides for delivery to anyone designated by the defendant as an
“agent” for purposes of service of process. CPLR 308(4) is generally known as “nail and mail”
service. It may not be utilized unless the plaintiff has, with “due diligence,” attempted to make
service under CPLR 308(1) or (2). It permits service by “affixing” a copy of the summons to the
door of the defendant’s actual residence or actual place of business, and mailing a copy to the
actual residence or actual place of business. CPLR 308(5) provides that upon a showing that
service by any of the other methods is “impracticable,” the Court may fashion another method of
service of process (often, although not always, the Court will, under these circumstances, permit
service by publication in newspapers of general circulation).
Service of process on a corporation may be made either pursuant to CPLR 311, or
pursuant to Sections 306 or 307 of the Business Corporation Law. CPLR 311 provides for
service upon an officer, director, or any other person “authorized by appointment or by law” to
accept service. The Court of Appeals has held that when a process server reasonably relies upon
corporate employees as to who has been authorized, service is valid even if in fact that employee
has not been authorized.
A New York corporation, or a foreign corporation authorized to do business in New York
by filing with the Secretary of State, and paying franchise taxes, may also be served pursuant to
Business Corporation Law §306. The plaintiff need only serve two copies of the summons upon
the New York Secretary of State in Albany. The Secretary of State will then forward a copy to
the defendant. Service is complete upon the plaintiff’s service on the Secretary of State.
A foreign corporation that is not authorized to do business in New York may, as an
alternative to service under CPLR 311, be served pursuant to Business Corporation Law §307.
The plaintiff must serve one copy on the New York Secretary of State, and one copy by mail
upon the defendant. The plaintiff must then file proof of compliance. Each of these steps is
essential to proper service.
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A partnership may be served pursuant to CPLR 310. CPLR 310(a) permits service upon
a partnership by means of “personal service” upon any partner. “Personal service” means any of
the methods listed under CPLR 308. The remaining subdivisions of CPLR 310 permit service
upon a partnership essentially in the same manner as service upon a person, or upon a
corporation under CPLR 311.
COMMENCING AN ACTION
In virtually all of the Courts in the State, an action is commenced by purchasing an index
number, and filing the summons and complaint, or summons with notice, with the “clerk of the
court” [CPLR 304]. In an action commenced in Supreme Court, the County Clerk of the County
in which the action is commenced is the “clerk of the court.”
A separate index number is required for every action or special proceeding, even for
those that are closely related. For example, if the plaintiff seeks pre-action disclosure, under
CPLR 3102(c), by purchasing an index number and commencing a proceeding for that relief,
and, after getting the disclosure, commences the principal action against the defendant, a new
index number must be purchased to commence the action. Until recently, Courts held that the
failure to purchase that second index number was a “fatal” defect, which, if challenged by
defendant, would require dismissal of the action. But CPLR 2001 has been amended to provide
that the Court may permit filing errors – even errors in purchasing an index number – to be
remedied.
After the action is commenced, the plaintiff must serve the summons with notice or
summons and complaint within 120 days of commencement [with one exception – if the cause of
action has a statute of limitations of 4 months or less, service must be made within 15 days of the
date the statute of limitations would have otherwise run]. If the plaintiff fails to timely serve, the
defendant may move to dismiss the action on that ground. The Court “shall” grant that motion,
unless it determines that, for good cause shown, or in the interest of justice, it should extend the
plaintiff’s time to serve.
STATUTE OF LIMITATIONS
For various policy reasons, the Legislature has determined that if a plaintiff waits too
long to commence an action, the plaintiff should be precluded from obtaining a remedy. It has,
therefore, created statutes of limitations, limiting the time in which the various causes of action
may be brought. Courts do not have the discretion to extend the statutory period.
Different causes of action have different time periods. For example, an action for breach
of contract must be brought within six years of the breach (or four years if the contract is for the
sale of goods). Most personal injury or property damage actions must be brought within three
years of the injury. Parties may agree to a shorter statute of limitations, and, after the cause of
action has “accrued” (that is, the event that starts the clock running has occurred), the parties
may agree to extend the statutory period.
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Three areas that have generated a lot of case law development are professional
malpractice, medical malpractice and product liability.
The statute of limitations for professional, non-medical, malpractice is three years. The
time begins to run from the act of malpractice, except when the professional continues to act for
the client with respect to the very matter in which the malpractice happened. Then, the clock
starts when that representation ends. The statute [CPLR 214(6)], provides that the time
limitation of an action for professional malpractice is three years “regardless of whether the
underlying theory is based in contract or tort.” That language was added to the statute to
overrule a line of cases holding that every contract for services requires the provider to exercise
due care. Because of those cases, every breach of duty by a professional was a breach of
contract (with a six year statute of limitations) as well as malpractice. The amendment provides
a three year statute regardless of the theory. However, even after the amendment to the statute,
where a professional promises to do something specific (for example, a doctor promises to cure a
patient, or a lawyer promises a specific result, rather than each promising to use good
professional skills), the failure to keep that promise may give rise to a breach of contract claim
with a six year statute of limitations.
Also, whether a breach of contract claim is available for failure to exercise due care will
depend on whether the provider is a “professional,” and therefore subject to a malpractice claim
under CPLR 214(6). A non-professional may still be sued within six years for breach of
contract. Courts have held that an insurance broker, or an actuary, is not a professional for these
purposes. One Appellate Division has held that investment bankers are professionals.
With regard to medical malpractice, one of the frequent problems is distinguishing
between a claim for malpractice (which has a two and a half year limitations period) and
ordinary negligence (which has a three year limitations period). The Court of Appeals has held
that the difference depends upon the nature of the duty that plaintiff claims has been violated. If
that duty involves the medical care of a patient, the claim is medical malpractice. If that duty
involves something else – such as custodial care – it is ordinary negligence.
Other issues involve the question of when the statute begins to run. Ordinarily, the two
and a half year period begins from the moment of the malpractice. Two principal exceptions to
that rule are the “foreign object rule,” and the “continuous treatment doctrine.” The foreign
object rule applies when a surgeon leaves something in the patient’s body at the end of the
surgery that was not supposed to be there (such as a sponge, or a clamp). Then the statute of
limitations is two and a half years from the bad act, or one year from discovery, whichever is
longer. But the foreign object must be something that was never intended to be left in the body.
So, for example, a stent left intentionally in plaintiff’s nose after surgery, which was supposed to
be removed several days later, but was not, does not thereby become a foreign object.
The continuous treatment doctrine provides that when the patient continues to be treated
by the medical provider for the same condition that gives rise to the claim, the two and half year
period does not begin to run until that continuous treatment ends. The theory behind this rule is
that the patient should be free to choose to continue treatment by the doctor who is trying to
ameliorate the problem, rather than having to sue that doctor. The Courts interpret this exception
strictly. It must be continuous – not episodic. It must be treatment – not merely diagnosis. And
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it must be for the same condition that gives rise to the claim. The Appellate Divisions have held
that the use of diagnostic tools may be treatment when used to test a known condition, rather
than being merely well-patient examinations.
In the area of product liability, much of the case law deals with “toxic torts” – that is,
injuries caused by exposure to a substance. Under New York common law, the three year statute
of limitations began to run from the moment of exposure – because that was an injury –
regardless how long it took before plaintiff was aware of the injury. Then the CPLR was
amended, by adding CPLR 214-c, which provides that when injury is caused by “exposure” to
“any substance,” the three year period for personal injury or property damage claims runs from
“discovery of the injury.” “Exposure” is defined by the statute as “direct or indirect exposure by
absorption, contact, ingestion, inhalation, implantation or injection.” The Courts have
interpreted “any substance” as including things that are both human made (like DES or asbestos),
or that exist in nature (like virus-contaminated blood). But Courts have said that things like
noise, cold air, or a computer keyboard, do not qualify as a “substance.” The Court of Appeals
has held that a plaintiff discovers “the injury” when the plaintiff is aware of more than de
minimis symptoms.
The CPLR also provides for certain tolls, for any cause of action. If a defendant is
outside the state when the cause of action accrues, or leaves the state for an extended period
thereafter, the “absence” toll of CPLR 207 will stop the clock while the defendant is out of state.
If the plaintiff is an infant (that is, under the age of 18), or insane (whether or not adjudicated an
incompetent) at the time the cause of action accrues, the statute does not begin to run (with
certain limitations) until the end of the infancy or insanity [CPLR 208]. If an action is timely
commenced, and is then dismissed for any reason other than for lack of personal jurisdiction, for
failure to prosecute, upon a voluntary discontinuance, or on the merits, then, even though the
statute of limitations has since run, the plaintiff may recommence the action, and serve process,
within six months of the dismissal [CPLR 205(a)].
CONTRIBUTION AND INDEMNIFICATION
In any tort case, when a defendant contends that someone else – whether already a party
to the action or not – is responsible for all or part of the plaintiff’s claim, that defendant may
assert a claim for contribution against the other. When the other is already a party to the action
(for example, plaintiff, a passenger injured in an automobile accident, has sued both drivers), the
defendant seeking contribution may cross-claim against the other defendant. When the other is
not a party (for example, the plaintiff-passenger has only sued one of the drivers), the defendant
seeking contribution may “implead” the other as a “third-party defendant” pursuant to CPLR
1007.
Contribution is available in any tort action (but not in a breach of contract action), when
the defendant can assert that the other has violated a duty either to the plaintiff, or to the claiming
defendant, and is therefore responsible for all or part of the plaintiff’s loss.
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A claim for indemnification is available either when there exists a contract of
indemnification between the claiming defendant and the other, or, as a matter of law, when the
claiming defendant’s liability to the plaintiff is based on the claiming defendant’s status, and
liability imposed by law, rather than any conduct by the claiming defendant (for example,
claiming defendant is liable because of its status as partner or employer of the other, or as owner
of the car the other drove). When the claiming defendant’s liability is vicarious, and arises out of
the actual conduct of the other, then the claiming defendant may seek indemnification.
General Obligations Law §15-108 provides that a plaintiff may settle with one jointtortfeasor, and continue the action against the others. The settling tortfeasor gives up any claim
of contribution against the remaining defendants, and none of the remaining defendants may seek
contribution from the settler (claims for indemnification, however, are not cut off by the
settlement). At trial, the jury will be asked to assess the responsibility of the settling defendant
as well as that of the remaining defendants. If the jury returns a verdict for the plaintiff, the
remaining defendants may deduct from the amount of the verdict the larger of the amount the
settler paid plaintiff or the settler’s share of responsibility as determined by the jury.
PROVISIONAL REMEDIES
Sometimes, and often at the very beginning of a lawsuit, a plaintiff needs immediate
relief, for example to provide security for an ultimate judgment because the defendant is
threatening to dispose of all assets. Or, the plaintiff needs to prevent the defendant from doing
the very thing, while the action is pending, that the action seeks to prevent permanently. Or, the
plaintiff, a frustrated buyer of real property, needs to put the world on notice that if anyone buys
the property while the lawsuit is pending, it buys the property subject to the plaintiff’s claim. Or,
the plaintiff needs to make sure that while the parties litigate over who owns a “chattel” (such as
a piece of art), that defendant is unable to hide, dispose of, or destroy, that chattel. That is the
function of provisional remedies.
An attachment is available in any action that seeks, at least in part, a money judgment,
and in which a plaintiff can demonstrate a need to have the sheriff take actual or constructive
possession of a defendant’s assets pending the end of the litigation. Typically, a plaintiff must
demonstrate that the defendant is hiding or disposing of assets in order to defraud creditors or to
make the judgment in the action unenforceable. And the plaintiff must show a likelihood of
success on the merits, and a balancing of the equities in its favor.
A preliminary injunction is available when a plaintiff is either suing for a permanent
injunction, or a defendant is threatening to injure plaintiff’s rights respecting the “subject” of the
action. It is not available in an action that seeks simply money damages, such as a personal
injury action. The plaintiff must show irreparable harm without the injunction, no adequate
remedy at law, and a likelihood of success on the merits.
A receiver may be appointed with respect to any asset that is the subject matter of an
action (such as real property secured by a mortgage being foreclosed, or the assets of a
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partnership being dissolved) on a showing that the asset may be “removed from the state, or lost,
materially injured or destroyed.”
In an action where the judgment would affect the ownership, use or possession of real
property, the plaintiff may, without Court order, file a notice of pendency, which puts the world
on notice of the plaintiff’s claim to the property. A notice of pendency lasts three years, but, if
the action is not resolved by then, it may be renewed by Court order – but only if the order is
obtained before the three years has elapsed.
Where the action involves the right to possession of a chattel, a plaintiff may seek an
order of seizure. If the Court concludes that it is “probable the plaintiff will succeed on the
merits,” the Court may order that the sheriff seize the property from the defendant.
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