## Facts

- A professional association entered a 1992 agreement with a credit-card program administrator and a bank to market a Visa card to its members and share card-related fees.
- The association sued the administrator in federal court under diversity jurisdiction for breach of contract, alleging improper withholding of fee information and failure to remit payments.
- The administrator’s principal office was a suite shared by four related companies; the administrator and one suite-mate had common ownership and leadership.
- A process server went to the shared suite and left the summons and complaint with an individual who worked there and was an assistant vice president of a different company in the suite, not of the administrator.
- The process server’s affidavit described the recipient as an assistant vice president of the administrator; the parties disputed whether the recipient represented he could accept service for the administrator and whether the papers were presented as legal process.
- The administrator’s president received the summons and complaint the same day, but the administrator did not timely respond.
- The clerk entered default and the court entered a default judgment.
- The administrator moved to vacate the default judgment under Rules 55(c) and 60(b)(4), arguing the judgment was void for lack of personal jurisdiction due to ineffective service.

## Issues

1. Whether leaving process with an employee of an affiliated company in a shared office suite constituted valid service on a corporation under Fed. R. Civ. P. 4(h) and New York CPLR 311(a)(1).
2. Whether the defendant’s actual receipt of the summons and complaint cured any defects in service sufficient to support personal jurisdiction.
3. Whether the defendant waived any objection to personal jurisdiction by its conduct after receiving notice.
4. Whether a default judgment entered without personal jurisdiction is void and must be vacated under Fed. R. Civ. P. 60(b)(4).

## Decision

- The court granted the motion to vacate.
- The default judgment was vacated under Rule 60(b)(4) as void for lack of personal jurisdiction.
- Service was held ineffective because the recipient was not an officer, managing or general agent, or authorized agent of the defendant corporation under Rule 4(h) or CPLR 311(a)(1).
- The court held that actual notice did not validate defective service.
- The court found no waiver because the defendant raised the jurisdictional defect at its first opportunity in responding to the default judgment.

## Legal Principles

- A corporation must be served by delivery of the summons and complaint to an officer, a managing or general agent, or another agent authorized by appointment or by law, or by a method permitted by the service law of the relevant state.
- Agency for service requires a relationship or corporate role that justifies presuming authority to receive process; employment by an affiliated entity sharing office space, without more, does not establish such authority.
- Apparent authority to accept service must rest on the corporation’s manifestations; ambiguous statements by a non-employee are insufficient absent conduct by the defendant holding the person out as its service agent.
- Actual notice of a lawsuit does not cure noncompliance with formal service requirements when personal jurisdiction is lacking.
- A default judgment entered without personal jurisdiction due to defective service is void within Rule 60(b)(4) and must be vacated; discretionary factors such as prejudice do not control.
- A personal-jurisdiction objection is not waived when asserted at the first appearance in the case and the defendant has not litigated the merits.

## Conclusion

The court vacated a default judgment because the plaintiff failed to effect valid service on the corporate defendant under Rule 4(h) and New York law, and the defendant’s same-day receipt of the papers did not supply personal jurisdiction or waive the service defect.


Am. Inst. of Certified Pub. Accts. v. Affinity Card, Inc., 8 F. Supp. 2d 372 (S.D.N.Y. 1998)