January 17, 2008
JOHN B. DAMONTE, PLAINTIFF-RESPONDENT,
WILLIAM C. MARTUCCI, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Essex County, DJ-216439-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: December 12, 2007
Before Judges Collester and C. L. Miniman.
Defendant William C. Martucci appeals from the denial of his post-judgment motion to vacate a default judgment awarded to plaintiff John B. Damonte in the State of California, which was domesticated in New Jersey in 2006. The motion judge denied Martucci's application on the ground that he had not established that he was denied procedural due process and declared the judgment enforceable. We affirm.
On March 28, 2005, Damonte recovered a judgment by default in the California Superior Court in San Mateo County in the total sum of $404,285.40. Prior to the entry of judgment, Martucci through his California attorney moved on June 2, 2004, to quash the service of the summons and complaint on the ground that the court in California could not constitutionally exercise in personam jurisdiction over Martucci. That motion was apparently denied. Martucci's counsel withdrew from the matter and Martucci appeared pro se commencing on February 18, 2005. Although he sought a ninety-day adjournment of the trial scheduled for March 28, 2005, that was apparently denied. Martucci did not appear for trial and judgment was entered by default.
The judgment recited a $155,000 loan by Damonte to Electronic Marketing, Inc. (EMI), of which Martucci was president. The interest on the promissory note was forty-eight percent per annum with principal and interest due on or before January 15, 1998. The note was secured by a UCC-1 filing, a security agreement on $310,000 due EMI from Crystal Geyser Water Company (Crystal Geyser) and the personal guarantee of Martucci. The judgment contained these findings of fact: EMI had no account receivable from Crystal Geyser, Martucci had no intention of repaying the loan and Damonte relied to his detriment on intentional misrepresentations of material facts. The court awarded Damonte the principal on the note of $155,000 plus $111,635.39 in accrued interest. Additionally, the court awarded $100,000 in punitive damages, $35,289.98 in attorney fees*fn1 and $2360.40 in costs.
On November 16, 2005, Martucci filed a motion in California for relief from the judgment based on mistake or inadvertence and presented defenses to the action. That motion was denied on December 13, 2005, on the ground that Martucci "failed to meet his burden to show that the judgment was the result of mistake, inadvertence, surprise or excusable neglect."
On August 25, 2006, the judgment was recorded in New Jersey under the Uniform Enforcement of Foreign Judgments Act (UEFJA), N.J.S.A. 2A:49A-25 to -33, and the Clerk of the Superior Court issued an undated notice of docketing to Martucci. Martucci prepared, and may have filed, a document titled "Affirmative Answers" in Essex County setting up defenses on the merits and claiming a deprivation of due process. On October 3, 2006, Martucci filed a notice of motion to vacate the default judgment on the grounds that he did not receive due process in California, the California action was filed after the statute of limitations expired and he was not informed by the California court. Damonte opposed the motion, and his attorney certified that Martucci was personally served in New Jersey by a private process server, he failed to respond and on March 28, 2005, a default judgment was entered against him. Counsel asserted that the time to appeal under California's Civil Practice Law and Rules had expired and argued that Martucci was collaterally estopped from attacking the judgment and that New Jersey was required to recognize the judgment under the Full Faith and Credit Clause of the United States Constitution, Art. IV, § 1. On February 16, 2007, the Law Division judge denied Martucci's motion on the ground that he had failed "to establish breach of procedural due process, accordingly this judgment is enforceable." This appeal followed.
Martucci argues on appeal that he was in ill health, could not travel and was disadvantaged in trying to represent himself in California. He also contends that the California statute of limitations barred the action and Damonte lacked standing to sue because the lender on the promissory note was "Transcorp C/F John B. Damonte" Finally, he asserts that $5000 was paid before judgment was entered and should have been applied to principal, not interest. Damonte responds that the Full Faith and Credit Clause requires New Jersey to recognize the California judgment and that Martucci may not collaterally attack it.
The UEFJA is "this State's selected means for discharging its Full Faith and Credit obligations." Singh v. Sidana, 387 N.J. Super. 380, 382 (App. Div. 2006) (citing Enron (Thrace) Exploration & Prod. BV v. Clapp, 378 N.J. Super. 8, 15 (App. Div.), certif. denied, 185 N.J. 392 (2005)), certif. denied, 189 N.J. 428 (2007). "The UEFJA defines an enforceable 'foreign judgment' as 'any judgment, decree, or order of a court of the United States or of any other court which is entitled to full faith and credit in this State.'" Hall v. Michael Bello Ins. Agency, Inc., 379 N.J. Super. 599, 603 n.5 (App. Div. 2005) (citing N.J.S.A. 2A:49A-26). The California judgment at issue here "has the same effect as a New Jersey judgment." Ibid. (citing N.J.S.A. 2A:49A-27).
A properly authenticated foreign judgment may be filed with the Clerk of the Superior Court. Singh, supra, 387 N.J. Super. at 383-84. When such a judgment is filed,
The clerk shall treat the foreign judgment in the same manner as a judgment of the Superior Court of this State. A judgment so filed has the same effect and is subject to the same procedures, defenses and proceedings for reopening, vacating, or staying as a judgment of a Superior Court of this State and may be enforced in the same manner.
Thus, a litigant may seek relief from a judgment pursuant to R. 4:50-1. However, defenses to the merits of a claim must be presented to the tribunal rendering the judgment. See Morris v. Jones, 329 U.S. 545, 552, 67 S.Ct. 451, 456, 91 L.Ed. 488, 496 (1947). Martucci's claims that the action was barred by the applicable California statute of limitations, Damonte lacked standing to sue and partial payment had been made can only be presented to the California Superior Court.
His claims that he was in ill health, could not travel and was disadvantaged by appearing pro se are not cognizable grounds for relief from a judgment. R. 4:50-1 provides:
On motion, with briefs, and upon such terms as are just, the court may relieve a party . . . from a final judgment or order for the following reasons: (a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under R. 4:49; (c) fraud . . ., misrepresentation, or other misconduct of an adverse party; (d) the judgment or order is void; (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of the judgment or order.
Plaintiff's health, ability to travel and pro se appearance in California are not reasons within the intendment of the rule that justify relief from the operation of the judgment.
The only possible remaining ground for relief from the operation of the judgment would be a denial of due process.
In accordance with the constitutional mandate, New Jersey courts will enforce the judgments entered by the courts of sister states unless there has been a denial of due process. These due process denials occur when "the rendering state 1) lacked personal jurisdiction over the judgment debtor, 2) lacked subject matter jurisdiction, [or] 3) failed to provide the judgment debtor adequate notice and an opportunity to be heard." Choi v. Kim, 50 F.3d 244, 248 (3d Cir. 1995); see also Security Benefit Life Ins. Co. v. TFS Ins. Agency, 279 N.J. Super. 419, 423 (App. Div. 1995). Trial courts of sister states may inquire into defenses of lack of jurisdiction in the foreign court or fraud in procurement of the judgment, provided that those issues have not been litigated in the forum court. Firstar Bank Milwaukee, NA v. Cole, 287 Ill. App. 3d 381, 222 Ill. Dec. 796, 678 N.E.2d 668, 670 (1997). Therefore, absent such due process defenses, a litigation pursued to judgment in a sister state is conclusive of the rights of the parties in the courts of every state as though adjudicated therein. DeGroot, Kalliel, Traint & Conklin, P.C. v. Camarota, 169 N.J. Super. 338, 343 (App. Div. 1979). The doctrine of res judicata precludes raising anew any defenses that litigants could have raised in the forum state.
Ibid.; Firstar, 222 Ill. Dec. 796, 678 N.E.2d at 670. [Sonntag Reporting Serv., Ltd. v. Ciccarelli, 374 N.J. Super. 533, 538 (App. Div. 2005) (emphasis added).]
Martucci is not entitled to relief on due process grounds because he has not produced sufficient evidence to prove that California's exercise of in personam jurisdiction over him was constitutionally infirm. He has also not made out a prima facie case of inadequate notice and lack of opportunity to be heard. Finally, and even more conclusively, these issues were litigated in California and may not be relitigated here. Ibid.