United States District Court, D. Nevada
the court is defendants' VNUE, Inc. (“VNUE”)
and Matthew Carona (“Carona”) (collectively
“defendants”) motion to quash, dismiss, and
transfer venue (ECF No. 11). Plaintiffs Seva Safris
(“Safris”) and Alex Yuryev (“Yuryev”)
(collectively “plaintiffs”) have opposed (ECF No.
12), and defendants have replied (ECF No. 14).
a “startup” company that has the intended
business of recording live music performances for delivery to
mobile devices. (ECF No. 11-1 (Carona Decl. ¶ 3); ECF
No. 15 (Carona Supp. Decl. ¶ 4)). Carona is currently
the chief operating officer of VNUE. (ECF No. 11-1 (Carona
Decl. ¶ 1)). Plaintiffs are former employees of VNUE who
have sued defendants on several grounds, including breach of
contract and fraud. Plaintiffs assert that their employment
contracts with VNUE have not been honored and that they have
not been paid for work performed, despite repeated assurances
from Carona that they would be paid.
incorporated VNUE in Washington state in 2013 and later
merged VNUE with a company incorporated in Nevada. (ECF No.
11-1 (Carona Decl. ¶ 2)). The surviving entity was
incorporated in Nevada and took VNUE's name going
forward. (Id.) After the merger, VNUE moved its
operations to New York City, where it has an office and where
most of VNUE's contacts, relationships, and business are
located. (Id. ¶ 4). Carona is currently
VNUE's chief operating officer and works out of the New
York office one to two times a week. (ECF No. 15 (Carona
Supp. Decl. ¶¶ 1-2)). VNUE claims that two
individuals, including its employee Peter Slavish,
work out of the New York office. (Id. ¶ 3).
dispute how much of VNUE's work is actually performed in
New York, arguing that while VNUE has an office in New York
City, only Slavish works there, that all of VNUE's
officers reside outside of New York, and that ultimately VNUE
does business wherever live music performances occur, which
is all over the country. (See ECF No. 12-1 (Safris
Decl. ¶¶ 7 & 16)).
Yuryev is and at all relevant times has been a resident of
Minnesota. (Id. at ¶ 2). Plaintiff Safris is
currently a resident of California, though at the times
relevant to the complaint he worked for VNUE from Bangkok,
California, and for a brief period of time, New
York. (ECF No. 1 (Compl. ¶ 1); ECF No. 11-1
(Carona Decl. ¶ 10 & ¶ 15); ECF No. 12-1
(Safris Decl. ¶ 9)). Carona lives in New York and
Massachusetts but considers himself domiciled in
Massachusetts. (ECF No. 1 (Compl. ¶ 4); ECF No. 11-1
(Carona Decl. ¶ 5)). As already stated, VNUE is a Nevada
corporation with an office in New York.
have moved to quash service of process, to dismiss Carona for
lack of personal jurisdiction, and to transfer venue to the
Southern District of New York. Plaintiffs oppose all motions.
Motion to Quash Service of Process
service of process has been insufficient, the court may
either quash the service or dismiss the action. Fed.R.Civ.P.
12(b)(5); S.J. v. Issaquah Sch. Dist. No. 411, 470
F.3d 1288, 1293 (9th Cir. 2006). On June 9, 2017, plaintiffs
served copies of the summons and complaint in this action on
Peter Slavish. (ECF No. 11 (Gaw Decl. Exs. 1 & 2)).
According to the process server, Slavish represented that he
was authorized to accept service on behalf of VNUE.
(Id. at Ex. 2). Plaintiffs also mailed copies of the
summons and complaint via first class mail to defendant
Carona at VNUE's New York office. (Id. at Ex.
1). Defendants argue that this did not constitute proper
service of process on either Carona or VNUE and therefore
service of process must be quashed.
Federal Rule of Civil Procedure 4(e), an individual may be
served in accordance with the federal rules, the law of the
state where the court is located, or the law of the state
where service is made. Plaintiffs contend that they followed
the law of New York - the state where service was made - in
effecting service on Carona and that under New York law
service was proper.
relevant part, New York permits “[p]ersonal service
upon a natural person . . . by delivering the summons within
the state to a person of suitable age and discretion at the
actual place of business . . . of the person to be served and
by . . . mailing the summons by first class mail to the
person to be served at his or her actual place of business .
. . .” N.Y. C.P.L.R. § 308(2). The statute
requires that delivery and mailing “be effected within
twenty days of each other” and that proof of service
“be filed with the clerk of the court designated in the
summons within twenty days of either such delivery or
mailing, whichever is effected later.” Id. The
statute provides that “service shall be complete ten
days after” the proof of service is filed with the
clerk of the court. Id.
apparently conceded by defendants, VNUE's New York office
is Carona's “actual place of business, ” as
he works out of the office at least a couple times a week and
is the co-founder of VNUE. Thus, plaintiffs' service of
the summons and complaint on Slavish, a person of suitable
age and discretion, at VNUE's New York office, and
subsequent mailing of the summons and complaint to Carona at
the VNUE New York office, satisfied the first two
requirements of § 308(2).
the statute also requires the filing of the proof of service
with this court within twenty days of delivery or mailing. No
such filing was made by plaintiffs within the twenty-day
period. Although courts in New York are split on whether this
requirement is jurisdictional, the weight of authority is
that it is - particularly for federal court jurisdiction. See
Creative Kids Far East Inc. v. Griffin, 2016 WL
8710479, at *2-3 (S.D.N.Y. Jan. 22, 2016) (finding that, for
purposes of removal, a defendant is not a party until service
is “complete” - ten days after proof of service
is filed with the court); Stop & Shop Supermarket Co.
LLC v. Goldsmith, 2011 WL 1236121, at *3-6 (S.D.N.Y.
Mar. 31, 2011) (recognizing split of authority and ultimately
concluding that service is not proper for purposes of removal
until plaintiff has timely filed proof of service with the
court); Pope v. Rice, 2005 WL 613085 (S.D.N.Y. Mar.
14, 2005); Roth v. Syracuse Hous. Auth., 2002 WL
31962630, at *12 (N.Y. Sup. Ct. July 17, 2002) (“[T]he
Court finds that the specific language of CPLR 308(2) confers
jurisdictional import upon the filing which is accomplished
in connection with that section.”); Howard v.
Klynveld Peat Marwick Goerdeler, 977 F.Supp. 654, 660
(S.D.N.Y. 1997) (“‘[L]eave and mail' service
under Section 308(2) is ineffective where a plaintiff does
not file proof of service with the clerk within twenty days
of the date on which the process server mailed the summons
court concludes that filing is a necessary requirement to
complete service of process. The plaintiffs' failure to
comply See S.E.C. v. Internet Sols. for Bus. Inc.,
509 F.3d 1161, 1167 (9th Cir. 2007). with this requirement is
jurisdictional. Therefore, the motion to quash service of
process on Carona is granted. Plaintiffs are granted leave to
effect proper service on Carona within thirty days of the
date of this order.
Rule of Civil Procedure 4(h)(1) allows service on a corporate
entity to be accomplished “by delivering a copy of the
summons and of the complaint to an officer, a managing or
general agent, or any other agent authorized by appointment
or by law to receive service of process - if the agent is one
authorized by statute and the statute so requires - by also
mailing a copy of each to the defendant.” As with
individuals, service may also be accomplished in accordance
with the relevant state laws, here New York and Nevada. New
York law requires service on a corporation to be made 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.” N.Y.
C.L.P.R. § 311.
argue that service on VNUE was proper under N.Y. C.L.P.R.
§ 308. However, § 308 pertains to the service of
individuals, not business entities. Plaintiffs were required
to serve VNUE in accordance with either federal law, Nevada
law, or N.Y. C.L.P.R. § 311, which provides the method
for service of a corporation in New York. Plaintiffs have not
explained how the purported service was proper under any of
these laws. Plaintiffs served VNUE by delivering a copy of
the summons and complaint to Slavish. Defendants represent,
without objection from the plaintiffs, that Slavish is not an
officer, director, managing or general agent, cashier or
assistant cashier, that Slavish has never been VNUE's
registered agent for service of process, and that Slavish has
never been authorized to accept service of process on
VNUE's behalf. Accordingly, plaintiffs have not shown