On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, DJ-220319-03.
Before Judges A. A. Rodríguez, Cuff and Weissbard.
The opinion of the court was delivered by: RODRÍGUEZ, A. A., P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 13, 2004
This appeal concerns the enforcement of a judgment entered by an Illinois court and docketed in New Jersey. We hold that the full faith and credit clause requires that R. 4:50-1(f), which permits relief from judgments for any reason justifying such relief, applies only to judgments entered by New Jersey courts and not those entered by courts in other states. We also hold that N.J.S.A. 2A:49A-27 does not apply to merit or substantive defenses to the judgment. These defenses must be raised in the forum state.
The facts are uncontroverted. Sonntag Reporting Service, LTD (Sonntag), appeals from an order vacating the docketing of an Illinois judgment, in the amount of $6,718.16, against Thomas Ciccarelli and Barry Wiegmann, individually and doing business as Schulman, Ciccarelli and Wiegmann, Certified Shorthand Reporters (SCW).*fn1 We reverse the order directing the Clerk of the Superior Court to vacate the docketing of the judgment.
Ciccarelli and Wiegmann were shareholders of SCW since 1994. In December 2000, Wiegmann sold all of his shares in SCW to Ciccarelli. The present dispute started in Illinois when Sonntag brought a breach of contract action against Ciccarelli, Wiegmann and SCW. Sonntag alleged that defendants failed to pay for court-reporting services. Although Wiegmann answered Sonntag's complaint, he subsequently failed to appear for a court-mandated arbitration, which was scheduled for September 27, 2001, two weeks after the World Trade Center attacks. The record does not disclose whether Wiegmann sought an adjournment of the arbitration hearing. Ciccarelli also failed to appear for the arbitration hearing. As a result, the court-appointed arbitrators awarded Sonntag $6,718.16. The Illinois court entered judgment by default in that amount against all defendants on November 28, 2001.
Contemporaneously, Wiegmann sued Ciccarelli in the Superior Court of New Jersey, Chancery Division, alleging that Ciccarelli had failed to remit full payment for the purchase of SCW shares. In addition, the complaint alleged that Ciccarelli had failed to satisfy several obligations, including the debt owed Sonntag that is the subject of this appeal. Following an evidentiary hearing, the Chancery Division judge ordered on December 21, 2001, that Ciccarelli:
Shall assume any and all obligations and amounts due and owing from [SCW] to... [Sonntag], and shall indemnify, defend and hold [Wiegmann] harmless against any and all claims, actions, proceedings, losses, liabilities and judgments incurred by or against [Wiegmann] in favor of... Sonntag.
A copy of this judgment was forwarded to Sonntag's attorney in Illinois.
Sonntag caused the Illinois judgment to be docketed in New Jersey pursuant to the Uniform Enforcement of Foreign Judgments Act (UEFJ), N.J.S.A. 2A:49A-27. Wiegmann moved in the Law Division to vacate the docketed judgment, pursuant to R. 4:50-1, arguing that he was not liable to Sonntag based on the Chancery Division judgment ordering Ciccarelli to pay said obligation. Wiegmann also argued that the Illinois court should not have entered default judgment against him because (1) his litigation against Ciccarelli was ongoing; (2) he was no longer a shareholder of SCW; and (3) he had difficulty traveling to Illinois for the arbitration due to the World Trade Center attacks. Lastly, Wiegmann argued that the Illinois court had no basis upon which to pierce SCW's corporate veil and hold him personally liable.
Sonntag opposed the motion to vacate the docketing. The Law Division judge granted Wiegmann's motion and ordered the docketed judgment in New Jersey vacated. The judge concluded that Wiegmann had made"a meritorious application pursuant to N.J.S.A. 2A:49A-27," and found that R. 4:50-1(f), which permits a judgment to be vacated for any reason justifying relief, required vacation of the judgment in this case, particularly in light of the Chancery Divison's allocation of the Sonntag obligation to Ciccarelli.
On appeal, Sonntag contends that the judge erred by: refusing to afford the Illinois judgment full faith and credit; and granting the motion to vacate. We agree with these contentions and reverse.
The United States Constitution provides that"[f]ull Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State." U.S. Const. art. IV, § 1. See also 28 U.S.C.A. § 1738 (2004). Thus, absent a due process violation, a state must provide a sister state's judgment the same effect as would be provided in the state that rendered the judgment. Durfee v. Duke, 375 U.S. 106, 109-11, 84 S.Ct. 242, 244-45, 11 L.Ed. 2d 186, 190-91 (1963); President & Dirs. of Bank of Ala. v. Dalton, 50 U.S. 522, 528, 13 L.Ed. 242, 245 (1850); First Wisconsin National Bank v. Kramer, 560 N.E.2d 938, 941 (Ill. App. Ct. 1990). The appropriate forum for ...