GECA STEWART ET AL RESPONDENTS v VOLKSWAGEN OF AMERICA INC ET AL DEFENDANTS… — Volkswagen 307

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Volkswagen 307

GECA STEWART, ET AL. RESPONDENTS, v . OF AMERICA, INC. ET AL. DEFENDANTS, WERK AKTIEN-GESELLSCHAFT, APPELLANT.

81 203, 613 N.E.2d 518, 597 612 (1993).


April 29, 1993

2 No. 93 N.Y. Int. 87]

Decided 29, 1993 This opinion is and subject to revision before in the New York Reports.

Herbert for Appellant.

E. Richard Rimmels, Jr. for BELLACOSA, J.:

Appellant-defendant Volkswagen (VWAG) appeals by leave of the Division from an order of court which affirmed Court’s denial of its motion to the action. VWAG claimed failed to acquire personal over it in accordance with Corporation Law § 307(b)(2). We conclude plaintiffs have not satisfied the strictly specified service of prescriptions necessary to acquire over a foreign corporation not to do business in New York. We therefore answer the certified question in the and grant the motion to dismiss the

Plaintiffs sued for damages for injuries arising out of automobile allegedly caused by the unintended of Audi 5000 vehicles by VWAG, a German corporation. The were exported to the United title was transferred to Volkswagen of Inc. (VOA), and they then sold to World Volkswagen Corp. which them to Audi dealers, who them to consumers.

Plaintiffs to secure jurisdiction over by serving the summons and complaint on the New Secretary of State pursuant to Corporation Law § 307. That of process section allows for on the Secretary of State as the agent of a corporation not authorized to do business in New The statute is precise as to the sequence of and notice actions necessary to and complete acquisition of jurisdiction. A must first serve the of State, and then either personally a copy of the process to the corporation or send a copy of the to:

such foreign corporation by mail with return requested, at the post office specified for the purpose of mailing on file in the department of state, or any official or body performing the function, in the jurisdiction of its incorporation,

or if no address is there specified, to its or other office there

or if no such office is there to the last address of such corporation known to the plaintiffs. Corporation Law § 307[b][2] [emphasis

In this case, plaintiffs the Secretary of State but did not deliver a personally to the foreign corporation, or a copy to the foreign corporation in with the order or specification of the delineation. Instead, they a summons and complaint to: Volkswagen of on behalf of Volkswagenwerk-Aktien Gesellschaft, 600 Avenue, Englewood Cliffs, 07632. The summons had a rider indicating that VWAG was and is a organized and existing under the of the Federal Republic of West whose post office is Rechtswesen Ausland, Wolfsburg West Germany. Plaintiffs that their choice for to VWAG complied with Corporation Law § 307(b)(2) and the courts have sustained their claim.

The dispositive issues (1) whether plaintiffs may properly on and drop down to the last completion specification in Business Law § 307(b)(2), i.e. mailing to the address of such foreign known to plaintiffs, without satisfaction or explanation of the preceding prescriptions; and (2) whether such option, if authorized, complied the direction that it be effected to the of such foreign corporation.

VWAG moved pursuant to 3211(a)(8) to dismiss the complaints it, on the ground that plaintiffs did not personal jurisdiction over it plaintiffs’ attempted service of on it did not comply with Business Law § 307(b)(2). VWAG further that as a foreign corporation in West Germany not authorized to do in New York, it must be served in with the Hague Service Concededly this was not done, but we not address that issue we conclude that Business Law § 307(b)(2) was not otherwise satisfied and the should be dismissed.

Supreme denied VWAG’s motion to stating that VOA was a proper for completion of service on and notice to The Appellate Division affirmed the stating that personal is acquired over a foreign pursuant to Business Corporation Law § by service made on a local so controlled by the foreign corporation the local corporation can be deemed a department of the foreign corporation. The corporation in such instance is the involuntary agent of the foreign [t]hus, if VOA is a mere department of VWAG was properly served Business Corporation Law § 307 ( Stewart v of Am. . 181 AD2d 4, 7). That court cited a number of non-New cases, as well as Luciano v Volkswagen (131 AD2d for the proposition that VOA is a mere of VWAG. Other cases ( v Volkswagen . 161 AD2d 1149; v Volkswagen of Am. . 159 AD2d 937) support a contrary proposition distinguished because in each of cases, unlike the case at VWAG raised a factual and presented evidence, as to whether VOA was a department of VWAG ( Stewart v of Am. . 181 AD2d, supra, at 8).

Volkswagen 307

The incontestable starting proposition in of this kind is that jurisdiction and service of process are plaintiffs have the burden of satisfaction of statutory and due process (see, Lamarr v Klein . 35 248, affd 30 NY2d Business Corporation Law § 307 establishes a sequence and progression of service options to acquire jurisdiction a foreign corporation not authorized to do in New York. We have made that these steps are of a jurisdictional nature which be strictly satisfied ( Flick v Corp. . 76 NY2d 50, 54). when VWAG contested effort to obtain New York over it by service on the New York of State, plaintiffs had to demonstrate not that notice had in some been mailed to VWAG or agent, but rather that the steps for gaining jurisdiction by and notice were precisely in the delineated sequence set forth in the

Plaintiffs were obligated in the instance to ascertain that was no post office address for VWAG to receive process or registered or office address for on file with the German of the Secretary of State before to the next level of notification i.e. mailing a copy of the to the last address [of VWAG] to plaintiff (Business Corporation Law § They did not do so and claim they under no obligation to proceed in strict sequential pattern.

We conclude that plaintiffs’ in this case suffer two key deficiencies. First, plaintiffs do not purport to satisfy the first two specifications, claiming without or support that they no burden to show attempted with them. In effect, take the position that can choose randomly from the of the statute. Second, even if for argument’s sake, were to proceed directly to the end of subdivision last known address it was not correctly utilized because sent the copy of the process to VOA at its in New Jersey on behalf of VWAG. is not VWAG’s last known as prescribed and contemplated by the statute, if VOA is a mere department of VWAG. plaintiffs’ own rider to the summons and shows that they an address for VWAG in Germany. a plaintiff chooses to try to acquire jurisdiction pursuant to Business Law § 307, which provides for constructively on the Secretary of State, the must be strictly complied and a second constructive service is not authorized. The statute offers no for notification through an agent, involuntary or not, when is invoked initially by service on the of State, an involuntary and legally agent in the first phase Newman v G.D. Searle and Co. . 50 574; Koepke v Bilnor . 55 Misc 2d 928).

We should that the agency doctrine on below is also flawed it is predicated on an inapposite set of relationships. The that service of process in with a different statutorily-prescribed on a wholly-owned subsidiary will service on a parent corporation and in jurisdiction over the parent is of no or aid to plaintiffs in this case Taca Intl. Airlines v of England . 15 NY2d 97). Corporation Law § 307 is not simply a method for on a corporation (contrast CPLR Rather, Business Corporation Law § 307 is a jurisdictional provision mandating where there is a basis for jurisdiction over an unauthorized corporation under CPLR 3, process against such corporation may be served upon the of state as its agent (Business Law § 307[a] [emphasis added]). the appointment of the Secretary of State as is constructive rather than an designation, the statute contains calculated to assure that the corporation, in fact, receives a of the process ( Flick v Stewart-Warner . 76 NY2d, supra, at 56), and compliance with [those is required (id. at 57).

Assuming they could overcome all the noted deficiencies, make a last leap that the last address of foreign corporation known to can be any address of the foreign corporation or its entities and need not be the principal of business of that corporation or, of such foreign corporation They find support for thesis on the sandy shoals of the Division conclusion that VOA is a department of VWAG. For plaintiffs, the New address of VOA which they to use to satisfy the statute is just as a last known address as an [of VWAG] in Germany. We cannot because if this argument accepted, it would desiccate the prescriptions of Business Corporation Law § and the rationale of Flick and would the application of the statute of dubious quality.

Finally, we note Luciano v Garvey Volkswagen AD2d 253, supra), so relied upon by plaintiffs, did not that VOA is a mere department of for all purposes. That case was on a question of liability under an warranty and may not serve on a collateral basis to establish that VOA is an of VWAG for purposes of service Business Corporation Law § 307(b)(2). VOA has not proven to be a mere department of in this case for purposes of jurisdictional statute.

Plaintiffs not having satisfied burden of establishing jurisdiction, the should be dismissed.

Accordingly, the of the Appellate Division should be with costs, and the certified should be answered in the negative and the to dismiss should be granted.

* * * * * * * * * * * * * * * * *

reversed, with costs, motion to dismiss the complaint as it granted and certified question in the negative. Opinion by Judge Chief Judge Kaye and Simons, Titone, Hancock and concur.

Volkswagen 307
Volkswagen 307
Volkswagen 307
Volkswagen 307

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