Hudson Private LP v. Creative Wealth Media Finance Corp.

Background

Hudson Private LP brought a New York state-court action against Creative Wealth Media Finance Corporation based on an alleged default under a July 2020 promissory note. The note involved a $3 million loan to finance the television series Shadowplay. Hudson Private sought the principal, contractual interest, additional interest after the stated maturity date, and attorney’s fees and expenses.

Instead of filing a traditional complaint, Hudson Private filed a summons and a motion for summary judgment under New York Civil Practice Law and Rules § 3213. Creative Wealth later removed the case to the U.S. District Court for the Southern District of New York based on diversity jurisdiction. The parties did not dispute that the requirements for diversity jurisdiction—including complete diversity and more than $75,000 in controversy—were met.

Issue and governing rules

The issue was whether Creative Wealth’s June 28, 2022 removal was filed more than 30 days after valid formal service. Federal law generally requires removal within 30 days after formal service of the initial pleading or summons. The court explained that informal notice or receipt of litigation papers does not start that period.

Because service occurred in Ontario, Canada, the parties agreed that Ontario law governed whether service on Creative Wealth was effective. Under the applicable Ontario rule, service on a corporation could be made by leaving the documents with an officer, director, or agent, or with someone at the corporation’s place of business who appeared to control or manage that place of business.

Evidence and findings

Hudson Private’s process server, Gerald Gratton, stated that he delivered the summons and motion on March 16, 2022, to Sheryl Hassen, whom he described as a Creative Wealth employee. Hassen stated that she worked for Epic Story Media, which sublet space from Creative Wealth, and denied working for Creative Wealth or agreeing to accept service on its behalf.

Because the affidavits conflicted, the court held a remote evidentiary hearing on September 6, 2022. The court found Hassen’s testimony credible in its entirety. It found that Gratton did deliver a package containing the service documents to Hassen, but it rejected the assertion that Hassen identified herself as a Creative Wealth employee.

The court also found that Hassen was not a Creative Wealth officer, director, or agent. It further found that she did not appear to control or manage Creative Wealth’s place of business. The court described her as presenting like a receptionist or secretary and found no other circumstances supporting the required inference of control or management.

Ruling and disposition

The court held that Hudson Private had not proved valid service on Creative Wealth on March 16, 2022. It also rejected Hudson Private’s alternative argument that service had occurred through discussions with Creative Wealth’s counsel, because the record showed no formal act of service.

The court therefore found that Creative Wealth’s June 28 removal was timely and denied Hudson Private’s motion for remand. The clerk was directed to close the motion at Docket 9, and the court stated that it would issue a separate order about the next steps in the litigation.

The conclusion contains an apparent wording error: after repeatedly identifying Hudson Private as the party seeking remand and stating that Hudson Private’s motion was denied, it says that the court “denies Creative Wealth’s motion for remand.”