The old game of “hide-and-seek” brings many of us back to our childhood as one of our favorite ways to pass time during the summer. As commercial practitioners know, the concept of serving a summons and complaint in a case can be similar to playing an adult version of “hide-and-seek.” However, the days in which service of a summons and complaint can only be accomplished by physical delivery to a defendant seem outdated in our ever-growing technology reliant society. A recent decision from Manhattan Commercial Division Justice Robert R. Reed confirms as much, finding that service of process by email will suffice when dealing with an elusive litigant.
In Jun Gao v Coconut Beach/Haw., LLC, Plaintiff was solicited by several defendants, including Jason Ding (“Defendant”), to invest in the development of a luxury hotel in Hawaii (the “Project”), which would purportedly qualify Plaintiff for an EB-5 Immigrant Investor Green Card. Plaintiff then entered into an agreement with defendants, whereby Plaintiff agreed to invest $550,000 into the Project (the “Agreement”). Over the next two years, several issues occurred with the construction of the Project.
As a result, in or around January 2020, Plaintiff and defendants entered into a withdrawal agreement, whereby defendants agreed to pay Plaintiff his initial investment of $550,000 (the “Withdrawal Agreement”). Despite many assurances, defendants failed to pay Plaintiff under the terms of the Withdrawal Agreement.
Plaintiff then commenced a litigation against defendants, alleging that defendants breached their contractual obligations by failing to fully compensate Plaintiff under the Withdrawal Agreement. During the course of litigation, Plaintiff filed a motion to serve Defendant via an alternate method of service pursuant to CPLR § 308(5) , which provides that “[p]ersonal service upon a natural person shall be made … in such manner as the court, upon motion without notice, directs, if service is impracticable under paragraphs one, two and four of this section.”
In describing for the court his unsuccessful efforts to serve Defendant, Plaintiff stated that he (i) performed a Westlaw Edge search that produced two addresses for Defendant in two different states (Illinois and California); (ii) attempted service on Defendant on seven different occasions at the Illinois and California addresses; (iii) sent demand letters to Defendant’s last known business address, which were all returned as “undeliverable”; and (iv) had his counsel personally visit Defendant’s last known business address, only to be told by the front desk concierge that none of the companies were tenants in the building. However, Plaintiff advised the court that he was aware of Defendant’s email address and was successful in sending Defendant a copy of the demand letter during the course of the litigation.
In its decision, the court first focused on the “impracticability” requirement of CPLR § 308(5), observing that its meaning depended on the facts and circumstances of the case. Based on its review, the court held that Plaintiff demonstrated numerous attempts to effect personal service on Defendant, as well as Plaintiff’s diligence in searching for an alternate address (personal and business) where Defendant could be served. The Court then focused on the method of alternate service (i.e. email) and whether it was an acceptable form of service. The court noted that the First Department held in (NMR e-Tailing LLC v Oak Inv. Partners, 216 AD3d 572 [1st Dept 2023]), that a plaintiff can properly effectuate service by email, and granted Plaintiff’s motion for alternate service upon Defendant.
In sum, the Coconut Beach decision serves as an important reminder that allowing for alternative methods of service (i.e. email) may put an end to certain hide-and-seek tactics and/or gamesmanship. That said, as advances in technology continue to shape the legal industry, it will be interesting to see how adaptable courts will be in allowing service of process via other digital platforms and/or methods (i.e. TikTok, Twitter a/k/a “X,” and Instagram).