Opinion ID: 811559
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: The dispute underlying this action concerns TAC’s failure to pay for clothes hangers and other materials it purchased from Alco Plastic Products Limited (“Alco”). Due to TAC’s failure to pay, Alco brought suit against it in the High Court of the Hong Kong Special Administrative Region Court of First Instance. In that proceeding, Alco requested that it be able to serve TAC at the address listed on file with the Division of Corporations of the New York Department of State: “236 West 40th St., New York, New York, 10018.” The Hong Kong Court granted Alco’s request. Alco retained Process Forwarding International to effectuate service at the 236 West 40th Street address and, on March 17, 2010, the writ of summons and statement of claim was delivered to an individual named “Pappe” at that address. TAC, however, never appeared before the Hong Kong Court. Thus, on May 10, 2010, the Hong Kong Court granted a default judgment in favor of Alco for approximately $270,000, including costs and fees. On June 9, 2010, Alco’s counsel sent a letter to TAC demanding payment. When the clerk delivering the letter could not locate TAC at 236 West 40th Street, he searched for more information regarding TAC’s location and delivered the demand letter to 250 West 40th Street. (Apparently, TAC moved to 250 West 40th Street sometime in 2007 but never updated its records with the Division of Corporations of the New York Department of State.) Settlement negotiations began shortly thereafter, and during those initial negotiations, counsel for TAC (not TAC’s current counsel) did not mention the issue of improper service. TAC’s counsel did not raise the issue of improper service until October 19, 2010, when it stated in a letter to Alco’s counsel that “[y]our client is surely aware that TAC did not have actual notice of the commencement of your action . . . and our client is of the opinion that your client’s judgment is unenforceable for this reason, among others.” Joint App’x at 221. No evidence was 2 offered to support the “surely aware” statement, and the record shows no other mention of the service issue until after Alco filed its action in the Southern District of New York to enforce the Hong Kong judgment. Indeed, TAC provided no evidence of improper service until it filed its motion for summary judgment on September 7, 2011 challenging service of process. After a conference call with the District Court regarding the summary judgment motion and after further investigation into the issue of service of process, Alco’s counsel came to the conclusion that it could not verify with certainty that service had been effectuated properly. Accordingly, Alco sent a letter to the District Court seeking voluntary dismissal of the action. TAC, however, refused to sign the proposed stipulation of voluntary dismissal and demanded that Alco bear the costs of the action. Nevertheless, on November 9, 2011, the District Court dismissed the action without prejudice and without costs. Just over a week later, TAC filed a motion for attorneys’ fees and related expenses, “pursuant to New York Unified Rules of Court § 130-1.2 and Southern District of New York Local Civil Rule 54.1(a),” alleging that Alco engaged in frivolous conduct and brought the underlying enforcement action in bad faith. The District Court denied TAC’s motion for attorneys’ fees and related expenses on December 5, 2011. This appeal followed.