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Posted: February 13, 2017

Court Finds Service of Information Subpoena/Restraining Notice on Party’s Counsel Adequate

On February 3, 2017, Justice Singh of the New York County Commercial Division issued a decision in Deutsche Bank AG v. Sebastian Holdings Inc., 2017 NY Slip Op. 30241(U), holding that service of an information subpoena and restraining notice on a party’s counsel was sufficient service, explaining:

Defendant argues that it was not properly served with the information subpoena with restraining notice and the deposition subpoena. Plaintiff served the Information Subpoena with Restraining Notice and deposition subpoena upon defendant’s New York counsel. At issue is whether the service was proper, given that SHI is a non- domiciliary.

At the commencement of this action, this court held that it had jurisdiction over defendant, despite the latter’s argument to the contrary. SHI brought an action against Deutsche Bank in New York alleging breach of various agreements. The bank commenced. a similar action in London alleging that SHI breached the agreements. Deutsche Bank prevailed in London and sought to domesticate the judgment in New York. This court found that service on SHI through its attorneys was proper pursuant to CPLR 303 as plaintiff could have interposed the judgment as a counterclaim in the related action.

Deutsche Bank now seeks to enforce its money judgment under Article 52 of the CPLR. The judgment has not yet been satisfied, the action, of course, is still pending for purposes of enforcing the judgment. Accordingly, since this action is still pending, the court may continue to exercise jurisdiction over SHI. In Coutts the First Department held that CPLR 303 is extended to the service of a subpoena since the judgment-debtor has, by his voluntary act in demanding justice from the judgment-creditor in federal court, submitted himself to the jurisdiction of the state court. Similarly, here SHI, a non-domiciliary, appeared in New York on its own volition, seeking redress against Deutsche Bank under our laws and submitted to the jurisdiction of the court. It is not unreasonable or unfair for SHI to anticipate that Deutsche Bank will continue to attempt to enforce its judgment in New York.

CPLR 5224(a)(3) also states that service of an information subpoena may be made by registered or certified mail, return receipt requested. The language of the statute is permissive and not mandatory. Moreover, CPLR 5222 provides that a restraining notice shall be served personally in the same manner as a summons or by registered or certified mail, return receipt requested. CPLR 318 authorizes a person or entity to designate a person to act as agent for service of process. CPLR 308(3) dealing with service of summons, allows service of process to be made on that agent in behalf of the principal. Here, defendant’s attorney has been designated as agent to accept service of behalf of defendant. Moreover, pursuant to CPLR 311(b), this court may direct alternative service on a corporation defendant. Therefore, plaintiff complied with the CPLR by serving the subpoenas on defendant’s attorney.

(Internal quotations and citations omitted).

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