Colbert v. International Security Bureau, Inc.

79 A.D.2d 448, 437 N.Y.S.2d 360, 1981 N.Y. App. Div. LEXIS 9727
CourtAppellate Division of the Supreme Court of the State of New York
DecidedMarch 23, 1981
StatusPublished
Cited by43 cases

This text of 79 A.D.2d 448 (Colbert v. International Security Bureau, Inc.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Colbert v. International Security Bureau, Inc., 79 A.D.2d 448, 437 N.Y.S.2d 360, 1981 N.Y. App. Div. LEXIS 9727 (N.Y. Ct. App. 1981).

Opinion

OPINION OF THE COURT

Damiani, J. P.

This case presents two questions concerning the defense [449]*449of lack of in personam jurisdiction; one is recurrent, the other novel.

The plaintiffs sue to recover damages for defamation arising out of a private investigative report commissioned by the defendant Southern Railway Company from the defendant International Security Bureau, Inc., and allegedly prepared by defendant Arthur J. Schultheiss, an officer and director of International Security. On or about December 30, 1977 plaintiffs’ attorney drew a summons and complaint and turned them over to a process server for delivery to the named defendants. The validity of the process server’s attempt at serving defendant Southern Railway Company was challenged by that defendant and on appeal was ultimately sustained (Colbert v International Security Bur., 70 AD2d 945, affd 49 NY2d 988). This appeal involves the other two defendants.

The process server went to the offices of International Security where defendant Schultheiss was employed and left a copy of the summons and complaint with Lenore Sobel, one of its employees.

Apparently Mrs. Sobel turned the papers over to a responsible officer of the corporation and he referred the matter to its attorney. Since the summons and complaint named both International Security and Schultheiss as defendants and charged them jointly with defaming plaintiffs in an investigative report prepared as a part of the corporation’s business, the attorney drew a joint answer for both of those defendants which denied" the material allegations of the complaint and set forth the following four defenses: (1) failure to state a cause of action, (2) lack of personal jurisdiction over the answering defendants, (3) truth, and (4) qualified privilege.

The plaintiffs moved to strike the affirmative defense of lack of jurisdiction from the answer of International Security and Schultheiss, claiming that Mrs. Sobel was a managing agent and that Schultheiss had answered as a “volunteer” and had therefore submitted himself to the jurisdiction of the court. Those defendants cross-moved to dismiss upon the ground of lack of jurisdiction. The cross motion was [450]*450supported by the affidavit of Schultheiss which stated: “At no time have I ever been served with a copy of the complaint either by personal service or by mail at my home or office”.

On November 27, 1978 a hearing was held on the motion and cross motion before Mr. Justice Bellard. The evidence adduced at the hearing disclosed that Lenore Sobel had been employed by International Security for a period of nine years. The other persons who worked in the office were Mr. Schultheiss and Mr. Van Norden, who were officers of the corporation, approximately seven investigators, who prepared the investigative reports that were the corporation’s business, and Miss Panzer, who had administrative duties and worked with the investigators.

Mrs. Sobel testified that her duties consisted of taking telephone messages and relaying them to the investigators, who often worked outside the office, and to Mr. Schultheiss and Mr. Van Norden. She ordered stationery and supplies when directed to do so, and she did light bookkeeping. An accountant checked her books once a month. Checks received from clients in payment for services were accepted by her and held for safekeeping. She prepared the payroll checks but did not have “signatory powers”.

In the absence of corporate officers, Van Norden and Schultheiss, no one was “in charge” of the office and no One was authorized to accept service of process. Mrs. Sobel testified that in the nine years that she had worked for International Security she had never been served with a summons or subpoena. She explained that she did not supervise anyone, stating “I take the orders. I don’t give them.” Each employee had his or her own work to do and, when the officers were out of the office, performed his or her duties more or less on an honor system.

January 16,1978 was one of the very “rare occasion [s] ” upon which Mrs. Sobel had been left alone in the office. A process server entered and asked whether there was anyone else present. Mrs. Sobel told him that she was alone and he then stated that he was going to leave a summons for International Security with her. She refused to take it but “he said it is the law, I have to take it”, and he dropped [451]*451it on her desk and walked out. The process server then provided the plaintiffs’ attorney with an affidavit stating that he had served Mrs. Sobel as the “managing agent” of defendant International Security. He was not called to testify at the hearing.

The hearing minutes contain the following colloquy between court and counsel (Norman Lowenthal for plaintiffs, Sebastian J. Navarra for defendants International Security and Schultheiss) on the issue of jurisdiction over Schultheiss :

“Mr. Lowenthal: Your Honor, at the outset they speak in terms of the alleged service of Arthur J. Schultheiss. There is no question that Arthur J. Schultheiss was never served; but he voluntarily appeared in this action. Once he voluntarily appears in the action we have jurisdiction of this man. We have never said we served the man. In his answer he appeared.

“The Court : Did he appear specially?

“Mr. Lowenthal : No. The general answer we never served him. He voluntarily appeared. That is jurisdiction.

“Mr. Navarra : * * * This appearance by Mr. Schultheiss in this action was raised by an affirmative defense of lack of jurisdiction. Our memorandum of law in support of the same amply demonstrates and cites cases that indicate where the issue of jurisdiction and lack of jurisdiction was raised it is not waived.

“The Court : All I ask you is if he appears specially * * *

“Mr. Lowenthal : Here is the affidavit, your Honor. (Handed)

“Your Honor, as far as the other defendant, Arthur Schultheiss, we do not have any affidavit of service. We have never claimed that we ever served this man with a summons and complaint; nor do we ever say we served somebody else on his behalf. It is our contention at this time that this man put in an answer, did not appear especially; and in that way he voluntarily subjected himself to the jurisdiction of this court.

“Mr. Navarra : Your Honor —

[452]*452“The Court: Counsellor, he makes the admission that Arthur Schultheiss had never been served.

“Mr. Navarra : Yes.

“The Court : Admits that.

“Mr. Navarra: Right.

“The Court : Now he is trying to say it was cured by answer, by an answer.

“Mr. Navarra: That is what he said, right.” (Emphasis added.)

After Mrs. Sobel testified, the closing arguments by counsel touched upon the point at issue:

“Mr. Lowenthal: * * * I now wish to argue the point as far as the service—the non-service upon a defendant who then puts in an answer and appears in that way; and then states in his answer that there was no service because of whatever it was. I say that is a voluntary service, a voluntary appearance and an answer * * *

“Mr. Navarra: Your Honor, taking the point of the question of whether Mr.

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Bluebook (online)
79 A.D.2d 448, 437 N.Y.S.2d 360, 1981 N.Y. App. Div. LEXIS 9727, Counsel Stack Legal Research, https://law.counselstack.com/opinion/colbert-v-international-security-bureau-inc-nyappdiv-1981.