Facts
- Gerard Flick sued Stewart-Warner Corporation for personal injuries allegedly caused by a malfunctioning hose manufactured by the corporation.
- Stewart-Warner was a foreign corporation not authorized to do business in New York when sued; it had surrendered its New York authority in 1952 and no longer had the Secretary of State designated as its agent for service.
- Flick mistakenly attempted service under N.Y. Business Corporation Law (BCL) § 306 by delivering process to the Secretary of State.
- The Secretary of State, after determining the corporation was unauthorized, nonetheless mailed the process to the corporation’s Chicago address by certified mail, and a return receipt showed delivery.
- Flick did not comply with BCL § 307 (the statute governing service on unauthorized foreign corporations), including the requirements that mailing be made by or on behalf of the plaintiff by registered mail and that an affidavit of compliance be filed.
Issues
- Whether New York courts obtain personal jurisdiction over an unauthorized foreign corporation when the plaintiff fails to comply with BCL § 307’s service requirements but the defendant receives actual notice.
- Whether service attempted under BCL § 306 can be treated as sufficient, or as substantial compliance, when the defendant is in fact unauthorized.
Decision
- The Court of Appeals reversed the order below.
- The court held that no personal jurisdiction was acquired because the plaintiff did not strictly comply with BCL § 307.
- The defendant’s motion to dismiss for lack of personal jurisdiction was granted, and the plaintiff’s effort to obtain a default judgment failed.
Legal Principles
- Service on an unauthorized foreign corporation must strictly comply with BCL § 307’s “specific, carefully structured” procedure.
- Actual notice to the defendant does not cure noncompliance with statutory service requirements that are conditions precedent to personal jurisdiction.
- For BCL § 307 service, the statute’s requirements—including mailing “by or on behalf of the plaintiff” by registered mail with return receipt and filing an affidavit of compliance—are mandatory jurisdictional prerequisites, not excusable technicalities.
Conclusion
Because the defendant was an unauthorized foreign corporation and the plaintiff did not follow BCL § 307’s prescribed method of service (including plaintiff-initiated registered mailing and an affidavit of compliance), the court lacked personal jurisdiction despite the defendant’s actual receipt of the summons and notice.