Too Little Too Late: An Example of the Failure of CPLR 306(b)’s Safety Net

A commercial division litigator knows the severity of missing a statutory deadline. We discuss the implications of missing a statutory deadlines here. CPLR 306(b) is unique in that it provides a statutory deadline for service of process, yet also provides a bit of a safety net for practitioners. However, in his recent decision in Plank, LLC v. Dutch Vil, LLC, commercial division Justice Richard M. Platkin (Albany County) reminds us that even safety nets may fail if stretched too thin.

CPLR 306(b) requires that service of process be made within 120 days of the filing of the summons and complaint. It also gives a late plaintiff two alternative arguments to bypass this statutory deadline and obtain an extension by demonstrating to the Court: 1) good cause shown or 2) in the interest of justice.

Good Cause Standard

Establishing “good cause” requires a showing reasonable diligence in attempting service. “Good cause will not exist where a plaintiff fails to make any effort at service, or fails to make at least a reasonably diligent effort at service.” (Bumpus v. New York City Tr. Auth., 66 AD3d 26, 32 [2d Dept 2009]). Justice Platkin determined that Plank, LLC’s complete lack of effort to serve defendants within the 120 day period barred its recovery under the good cause standard.

Interest-of-Justice Standard

The interest-of-justice standard is much more flexible and provides plaintiff the most latitude. The court is given discretion to balance the competing interests presented by the parties. The court may consider a variety of factors including expiration of the Statute of Limitations, the meritorious nature of the cause of action, the length of delay in service, the promptness of a plaintiff’s request for the extension of time, and prejudice to the defendant. (See Leader v. Maroney, Ponzini & Spencer, 97 NY2d 95, 105-106 [2001]).

While no single factor is determinative, Justice Platkin determined that the following factors weighed against plaintiff’s argument that an extension of time was warranted in the interest of justice:

• Service of process was not even attempted within the 120 day statutory period;
• Service of process was eventually completed, six months after the statutory deadline;
• Plaintiff is a reasonably sophisticated commercial entity with the resources and experience to conduct its litigation matters properly and in compliance with the CPLR;
• Plaintiff has prior experience participating in litigation; and
• Plaintiff’s “highly improvident” decision to commence a complex commercial litigation on a pro se basis, in direct contravention of CPLR 321(a) which directs a limited liability company (such as Plaintiff here) to prosecute a civil action through an admitted attorney.

In this instance, neither party demonstrated any prejudice so this factor was neutral to the Court’s determination.

Of note, the Court denied the plaintiff’s request for an extension of time under both standards, despite plaintiff’s attempted service one day prior to the expiration of the statute of limitations for its claims.

Takeaway: While CPLR 306(b) provides a commercial litigator a safety net, the net will not hold up against blatant disregard of the statutory requirements of the court.