Commercial Division Blog
Moving to Dismiss for Failure to Serve Complaint Does Not Waive Right Later to Move to Dismiss for Lack of Jurisdiction
On October 30, 2019, Justice Masley of the New York County Commercial Division issued a decision in Satterfield v. Vstock Transfer, LLC, 2019 NY Slip Op. 33279(U), holding that moving to dismiss for failure to serve a complaint did not waive the right later to move to dismiss for lack of jurisdiction, explaining:
Preliminarily, Capital LLC did not waive its right to assert lack of personal jurisdiction as a defense. CPLR 320 (b) provides that an appearance of the defendant is equivalent to personal service of the summons upon him, unless an objection to jurisdiction is asserted by motion or in the answer as provided in rule 3211. Accordingly, a defendant waives lack of personal jurisdiction as a defense by failing to assert it in the answer or on a motion to dismiss. Once Satterfield filed the complaint in this action, Capital LLC moved to dismiss for lack of personal jurisdiction, and therefore did not waive the defense. Although Satterfield argues that Capital LLC waived the defense by demanding a complaint and moving to dismiss for failure to file a complaint, a demand or such motion does not of itself constitute an appearance in the action. Capital LLC has raised jurisdiction as a defense from the inception of this litigation, and consistently maintained that position in subsequent motion practice. Satterfield's remaining arguments do not yield an alternative result, and therefore, the court will consider whether a basis for personal jurisdiction exists with respect to Capital LLC and the other moving defendants.
(Internal quotations and citations omitted).
This decision illustrates an issue that often arises in commercial litigation in New York. Whether the defendant is located on the other side of the world or across the Hudson in New Jersey, a New York court cannot assert jurisdiction over the defendant (that is, hear a case against it) unless there is a proper connection between the defendant and New York. Contact Schlam Stone & Dolan partner John Lundin at firstname.lastname@example.org if you or a client face a situation where you are unsure whether there is jurisdiction over you, or over a party with which you are having a dispute, in New York.