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NYDIC Management Services, L.LC. v. DS Montvale, L.L.C.

A-2473-06T2 (N.J. Super. App. Div. 2008) (Unpublished)

LIMITED LIABILITY COMPANIES; SERVICE OF PROCESS — For purposes of service of process, a limited liability company is not be treated as a partnership or unincorporated association.

A tenant sued its landlord. The landlord was a limited liability company. A default judgment was entered against the landlord, which then filed a motion to set aside the default. One of its arguments was that “service of process was defective because it was not made in compliance R. 4:4-4(a)(5). That rule governs the manner by which service is to be made upon partnerships and unincorporated associations; it specifies that a copy of the summons and complaint is to be left with an officer or managing agent, or, in the case of a partnership, with the general partner.” A limited liability company “is neither a partnership nor an unincorporated association.” And, New Jersey’s court rules “do not specifically provide for service of process upon limited liability companies.” Further, the Appellate Division, in this case, held “that in light of the statutory protection provided to the members of such companies against personal responsibility for the debts of the companies, [] limited liability companies should not be treated as partnerships or unincorporated associations for purposes of service of process.” In the Court’s view, “one of the purposes underlying the service provisions of R. 4:4-4(a)(5) is the potential for an individual partner’s liability which exists in a suit against a partnership. [According to the Court, that] potential does not exist in a suit against a limited liability company, and [the Court could] perceive no policy justification for insisting that a limited liability company be served in the same manner as a partnership.” In this case, the landlord-limited liability company did not deny that it had actual knowledge and “never questioned the authority of the individual who received the summons and complaint on its behalf.” Consequently, the Court upheld the service of process, ruling that it is not necessary to comply with the court rule for service upon partnerships and unincorporated associations when serving process on a limited liability company.

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