Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Arnold, White & Durkee v. Gotcha Covered Inc.

August 10, 1998

ARNOLD, WHITE & DURKEE, A PROFESSIONAL CORPORATION, PLAINTIFF-APPELLANT,
v.
GOTCHA COVERED, INC., AND STRIPBIND, INC. DEFENDANTS-RESPONDENTS.



Before Judges King, Kestin and Cuff.

The opinion of the court was delivered by: Cuff, J.A.D.

[9]    Argued: February 11, 1998

On appeal from the Superior Court of New Jersey, Law Division, Burlington County.

The opinion of the court was delivered by CUFF, J.A.D.

In this case we must decide whether the Full Faith and Credit Clause requires recognition of the judgment obtained by plaintiff in Texas, despite plaintiff's failure to advise defendants of their right to submit this fee dispute to arbitration pursuant to R. 1:20A-6. We hold that it does. We remand for further proceedings consistent with this opinion.

In September 1993, defendants Gotcha Covered, Inc. and Stripbind, Inc. were sued for patent infringement in the United States District Court for the District of New Jersey. Defendants retained plaintiff Arnold, White & Durkee, a law firm based in Texas, to represent them. In early 1994, two attorneys from the firm were admitted pro hac vice in the federal court in this district. In affidavits in support of this application, each attorney stated he would "abide by the New Jersey Court Rules."

The patent infringement suit was settled in September 1995. Soon thereafter, a fee dispute arose. Plaintiff claimed that defendants owed it $154,000. Plaintiff filed suit to collect the disputed fee in a Texas state court, but failed to notify defendants of their right to arbitrate this fee dispute. See R. 1:20A-6. Defendants filed no answer and plaintiff obtained a default judgment in the amount of $150,162.39 plus interest and attorneys' fees.

On August 13, 1996, plaintiff filed a complaint in the Superior Court of New Jersey, Law Division, to domesticate its judgment. Defendants responded with a motion to dismiss the complaint pursuant to R. 4:6-2(e) for failure to state a claim on which relief can be granted. Plaintiff's attorney argued that New Jersey was obligated to domesticate the Texas judgment pursuant to the Full Faith and Credit Clause of the United States Constitution, U.S. Const. art. IV, § 1. Defendants claimed that the Texas judgment was void and not entitled to full faith and credit.

The motion Judge granted defendants' motion and dismissed plaintiff's complaint without prejudice. He recognized the federal rule that full faith and credit is usually given to foreign money judgments; however, he referred to a narrow exception which exists when an important public policy interest is at stake. Here, he noted that the Supreme Court of New Jersey has a substantial public policy interest in regulating the practice of law. Recognizing that fee disputes are a frequent cause of complaints against attorneys, the Supreme Court has promulgated rules for the resolution of fee disputes. See R. 1:20A. The motion Judge concluded an attorney admitted pro hac vice agrees to be bound by all rules governing the practice of law in this State, including resolution of fee disputes. He also concluded that notice to the client of the right to submit a fee dispute was a jurisdictional prerequisite to filing a complaint for the collection of the fee. He reasoned that the Texas judgment was void because the plaintiff law firm failed to abide by the rules it had agreed to follow.

On appeal, plaintiff contends that the motion Judge erred in dismissing its complaint. Plaintiff argues that a court of this state may not refuse to enforce a judgment of another state even if the cause of action could not have been maintained in New Jersey. We agree.

Article IV, Section 1 of the United States Constitution states:

Full Faith and Credit shall be given in each State to the public Acts, Records, and Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records, and Proceedings shall be proved, and the Effect thereof.

This mandate has been codified at 28 U.S.C.A. § 1738 which states in pertinent part:

Such Acts, records and judicial proceedings or copies thereof, so authenticated, shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.