New York Appellate Court Restricts Application of Doctrine Estopping Civil Defendants from Asserting Lack of Service

Schlanger Law Group LLP

New York, NY (Law Firm Newswire) May 25, 2018 – New York courts have long held that a civil defendant who failed to update his or her mailing address with the Department of Motor Vehicles (DMV) could not assert lack of service if service was made at the address on file with the DMV.

In a significant victory for consumers, the New York Supreme Court, Appellate Division, First Department held on May 17 that this doctrine could not be applied to an out-of-state defendant who was not otherwise subject to the court’s jurisdiction.

Thomas Scaramellino, the defendant in Avis Rent A Car System, LLC v. Scaramellino, was served by an out-of-state plaintiff at his former residence in New York. Although the service address matched the one currently on file with the New York DMV, Scaramellino alleged that he had in fact moved to Massachusetts. Default judgment was entered, and the trial court denied Scaramellino’s motion to vacate the judgment .

The appellate court ruled in relevant part:

Although, as plaintiff argues, a defendant may be estopped from challenging the propriety of service of process based on his failure to notify the Department of Motor Vehicles of a change of address…he cannot be estopped on that basis from asserting that he is not subject to the jurisdiction of the courts of a state in which he is not a resident….

The court went on to say:

…if the Supreme Court finds that defendant was domiciled outside New York at the time of service and it therefore did not have personal jurisdiction over defendant, then defendant’s motion to vacate the default judgment should be granted, the judgment vacated, and the action dismissed for lack of personal jurisdiction.

According to Mr. Scaramellino’s attorney, Daniel A. Schlanger, “The ruling is good news for New York consumers, who have often been severely prejudiced by the DMV estoppel rule. The estoppel rule has the potential to prevent consumers from receiving proper notice in lawsuits that can have tremendous, long-term financial or other impact.”

While the First Department’s ruling does not do away with the rule, “it significantly limits its application, making clear that it cannot be used where the out-of-date DMV address is the basis for the Court’s personal jurisdiction over the consumer,” Mr. Schlanger explained.

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