Fashion Page, Ltd. v. Zurich Insurance

406 N.E.2d 747, 50 N.Y.2d 265, 428 N.Y.S.2d 890, 1980 N.Y. LEXIS 2333
CourtNew York Court of Appeals
DecidedApril 29, 1980
StatusPublished
Cited by167 cases

This text of 406 N.E.2d 747 (Fashion Page, Ltd. v. Zurich Insurance) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fashion Page, Ltd. v. Zurich Insurance, 406 N.E.2d 747, 50 N.Y.2d 265, 428 N.Y.S.2d 890, 1980 N.Y. LEXIS 2333 (N.Y. 1980).

Opinions

OPINION OF THE COURT

Wachtler, J.

The question in this case is whether a corporation was properly served pursuant to CPLR 311 (subd 1) when the process server delivered the summons to the vice-president’s secretary, who had been identified by the defendant’s receptionist and the secretary herself as a person authorized to accept service for the corporation. The Supreme Court held that under the circumstances the service was valid. The Appellate Division affirmed and granted the defendant leave to appeal to this court on a certified question as to the correctness of the Supreme Court’s determination.

The action is to recover on a fire insurance policy issued by the defendant, a foreign corporation authorized to do business in this State with offices at William Street in Manhattan. The complaint alleges that a building owned by the plaintiff and insured by the policy was destroyed in a fire on December 30, 1975. The plaintiff, allegedly, submitted a claim for over $225,000 which the defendant "failed or refused” to pay.

The action was commenced on December 13, 1976 by service of a summons and complaint at defendant’s office in Manhattan. On December 31, 1976 the defendant moved to dismiss on the ground that the person to whom the summons was delivered, Ann Robertson, was a secretary to the vice-president and not a managing agent or other person authorized to accept process on behalf of the corporation pursuant to CPLR 311 (subd 1).

At a hearing before a Special Referee, the process server testified that he went to the William Street address at approximately 12:45 on December 13, 1976. The building directory indicated that the defendant’s offices were located on the third floor. When he arrived at the defendant’s offices he went to the receptionist and stated: "I have a summons and complaint to serve on Zurich. Can you please tell me who I might see or who handles this.” The receptionist told him to proceed down a certain corridor and "see the girl sitting down there.” He did as directed and found Ann Robertson sitting at a desk. He told her that he had a summons and complaint to serve on [270]*270Zurich. She asked to see the papers and, after looking them over, said "Okay, leave it with me * * * I’ll take it.” When he asked her if she was authorized "to accept this”, she stated "I can take it.”

It was conceded that the receptionist and Ann Robertson were employed by the defendant for many years at its New York office, where there were over 100 employees. The receptionist testified that she was responsibile for directing visitors to the proper person within the office. Ann Robertson stated that she was the executive secretary for Joseph Scanlon, who was a member of the board of directors and the vice-president in charge of the New York office. Although she was the only executive secretary at that office and apparently had some independent authority over certain "files” and correspondence, she said that she was not an officer or managing agent of the corporation and had not been expressly authorized to accept service on its behalf.

She admitted, however, that she had received the summons and complaint in this case and that she had informed Mr. Scanlon of this when he returned from lunch. At his direction she had forwarded the papers to the company’s legal department by interoffice mail. She also admitted that she had regularly done this without objection for at least five years, whenever Mr. Scanlon was not in his office. As a result, during that period about half of the summonses brought to his office had been accepted by her. Her testimony on these points was confirmed by Mr. Scanlon.

There was some dispute between the defendant’s witnesses and the process server concerning the statements made at the time of service. The Referee, however, accepted the process server’s "version of the facts as to the manner in which the summons was delivered.” He concluded that the process server had acted with diligence and had served the summons in a manner which was calculated to, and did, give the defendant fair notice, when he served the person identified by the defendant’s employees as the party authorized to accept service for the corporation. He also found that although Ann Robertson’s job title was that of an executive secretary, "the actual duties performed by her included those of being a managing or general agent for the service of process.” The Supreme Court confirmed the Referee’s report and denied the defendant’s motion to dismiss.

The Appellate Division affirmed concluding that under the [271]*271circumstances Ann Robertson was "an 'agent authorized by appointment * * * to receive service’ ”. (69 AD2d 787.)

CPLR 311 (subd 1) provides that personal service upon a corporation, foreign or domestic, shall be made by delivering the summons "to an officer, director, managing or general agent, or cashier or assistant cashier or to any other agent authorized by appointment or by law to receive service”.

The defendant urges that Ann Robertson cannot be said to be a managing agent because she did not possess "general powers involving the exercise of judgment or discretion” (Taylor v Granite State Provident Assn., 136 NY 343, 346). It also argues that she cannot be considered an agent "by appointment”, because she was never expressly authorized to accept process for the corporation. Indeed the defendant claims that an agent "by appointment” must also be an agent "designated” for receipt of process pursuant to CPLR 318, which requires that the designation be in writing, acknowledged by the agent and filed with the county clerk.

The history and purpose of CPLR 311 (subd 1), indicates, however, that it should not be read in such a narrow and technical manner.

Over the years the Legislature has identified a large group of corporate personnel as agents for receipt of process. The summons may, of course, be served on any director or corporate officer, which includes the president, vice-president, secretary, assistant secretary, clerk of the corporation, treasurer, assistant treasurer or other persons "denominated by the corporation as officers” (1 Weinstein-Korn-Miller, NY Civ Prac, par 311.02). It may also be delivered to employees of lesser rank who, under a variety of titles, act as managing or general agents for the corporation (see, e.g., Barrett v American Tel. & Tel. Co., 138 NY 491; Tauza v Susquehanna Coal Co., 220 NY 259; cf. Coler v Pittsburgh Bridge Co., 146 NY 281, 283). The trend has been to enlarge rather than diminish the list of those who may accept process on behalf of the corporation. When the CPLR was adopted in 1963, the Legislature added to the list the "cashier or assistant cashier or * * * any other agent authorized by appointment or by law to receive service” (see 1 Weinstein-Korn-Miller, op. cit., par 311.02). The statute, of course, should be liberally construed (CPLR 104).

The purpose of CPLR 311 (subd 1) is to give the corporation notice of the commencement of the suit (Barrett v American [272]*272Tel. & Tel. Co., supra; Tauza v Susquehanna Coal Co., supra). Delivery of the summons to the officials or employees designated by the Legislature fulfills the statutory aim since their "positions are such as to lead to a just presumption that notice to them will be notice to the * * * corporation” (Tauza v Susquehanna Coal Co., 220 NY 259, 269, supra [Cakdozo, J.]).

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Bluebook (online)
406 N.E.2d 747, 50 N.Y.2d 265, 428 N.Y.S.2d 890, 1980 N.Y. LEXIS 2333, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fashion-page-ltd-v-zurich-insurance-ny-1980.