July 22, 2011
JAMES CROOK AND CINDY CROOK, PLAINTIFFS-RESPONDENTS,
INFANTI HOSPITALITY SEATING, INC., DEFENDANT-APPELLANT, AND VITTORIO INFANTI, APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. DJ-163984-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 10, 2011 -
Before Judges Graves, Messano and Waugh.
Defendant Infanti Hospitality Seating, Inc. (IHS) appeals from the
denial of its motion to vacate a domesticated judgment against it in
favor of plaintiffs James and Cindy Crook. Although not a defendant in
the action, Vittorio Infanti also appeals from the order enforcing an
information subpoena that was served on him by plaintiffs.*fn1
We have considered the arguments raised in light of the
record and applicable legal standards. We affirm in part, reverse in
part, and remand for further proceedings consistent with this opinion.
We gather from the record that James Crook, a resident of Indiana, alleged he was injured on June 11, 2003, when a defective stool he was seated on at the Blue Chip Casino in Michigan City, Michigan gave way. It was further alleged that IHS manufactured the stool. On November 10, 2005, plaintiffs secured a default judgment in the federal district court for the Northern District of Indiana in the amount of $495,000.*fn2 On July 15, 2009, plaintiffs' New Jersey counsel docketed the judgment in this state pursuant to the Uniform Enforcement of Foreign Judgments Act (the UEFJA), N.J.S.A. 2A:49A-25 to -33.
On or about February 12, 2010, plaintiffs moved to compel Vittorio "to sit for a supplementary proceeding in order to discover assets . . . which may be levied on." Defendants cross-moved opposing plaintiffs' request and seeking to transfer venue in the matter to the United States District Court for the Eastern District of New York. IHS also filed a separate motion to vacate the default judgment.
In support of the applications, defense counsel certified that although plaintiffs served IHS at 3075 Richmond Terrace, Staten Island, they "never acquired in personam jurisdiction" over IHS because plaintiffs "failed to personally and properly serve an individual in the corporation as required under" Rule 4:4-4. Counsel certified that IHS "was never involved in the sale of . . . stools to the gaming industry and was not active at the time of th[e] attempted service and [wa]s not active today." Counsel further certified that Vittorio "had corporations which sold . . . stools to the gaming industry back in 2004 and 2005," but "never sold said . . . stools under the name [IHS] to any casino or gaming industry outfit."
Lastly, counsel certified that another corporation, Infanti Hospitality Seating Enterprises, Inc. (Enterprises), was actively operated by Vittorio's ex-wife, Elizabeth Kavlakian, at the time plaintiff's judgment was secured. He claimed that Kavlakian, along with George Sharpe and Amboy National Bank, were involved in "perpetrating an ongoing fraud against [Vittorio]," the subject of pending RICO litigation in the federal court for the Eastern District.
Vittorio certified that the judgment actually referred to Enterprises, currently owned and operated by Kavlakian. Vittorio claimed that Kavlakian was operating the business at an address in Linden, New Jersey, that the corporation was formed "at the direction and advice of [his] former bank, Amboy National Bank, and its president, George Sharpe," and that he (Vittorio) was the victim of a "long running fraud . . . now the subject of a lawsuit filed in the Eastern District." Vittorio claimed he had "no connection whatsoever at any time to . . . [IHS]," "never engaged in any business under that name," and was never connected with the corporation. Vittorio further certified that he was not served with the summons and complaint by plaintiffs and "was completely unaware of any lawsuit."
Oral argument on the motions and cross-motion was heard on April 16, 2010. Plaintiffs contended that the judge lacked authority to vacate the Indiana judgment. The judge agreed:
The law is the law. The Constitution says that if some judge i[n] some other state renders a judgment I don't like, I have to say that's the judgment. So there's nothing I can do about it.
The judge also noted that he "ha[d] no power" to transfer venue in the matter to a federal court. He entered two orders granting plaintiffs' motion for supplementary proceedings, denying defendants' motion to vacate the judgment and denying the motion to transfer venue. This appeal followed.
Before us, defendants argue that the judge erred "in allowing an out of state foreign judgment to stand and operate as a valid docketed judgment in New Jersey" because plaintiffs failed to properly serve IHS. They also contend that the judge erred in failing to transfer venue to the federal court.
We have said:
New Jersey's version of the UEFJA . . . is this state's selected mechanism "for discharging its Full Faith and Credit obligations" under U.S. Const. art. IV, § 1. Singh v. Sidana, 387 N.J. Super. 380, 382 (App. Div. 2006), certif. denied, 189 N.J. 428 (2007). As we held in Sonntag Reporting Serv. Ltd. v. Ciccarelli, 374 N.J. Super. 533, 540 (App. Div. 2005), "[t]he focus of the UEFJ is the enforcement of judgments." The statute was designed "merely as a facilitating device and was not intended to alter any substantive rights of the parties in an action for enforcement of a foreign judgment." Id. at 539. Therefore, "merit or substantive defenses," which could have been raised in the foreign state, must be raised in that state's proceedings and cannot be used to collaterally attack the domesticated New Jersey judgment. Id. at 540.
However, the Constitutional requirements of the Full Faith and Credit Clause are predicated upon the judgment debtor having been accorded due process in the forum state. Id. at 538. A denial of due process occurs "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.'" Ibid. (quoting Choi v. Kim, 50 F.3d 244, 248 (3d Cir. 1995)). Thus, the judgment debtor may raise "due process defenses" in any enforcement action in New Jersey under the UEFJA. Sonntag, supra, 374 N.J. Super. at 540. This is consistent with our jurisprudence that pre-dates the 1997 passage of the UEFJA. See James v. Francesco, 61 N.J. 480, 485 (1972) (Full Faith and Credit Clause only applies to foreign judgment grounded upon proper jurisdiction over the debtor). [State of Maine v. SeKap, S.A. Greek Co-op. Cigarette Mfg. Co., S.A., 392 N.J. Super. 227, 235-36 (App. Div. 2007) (alterations in original).]
Although somewhat unclear from the moving papers and argument presented before the motion judge, we construe the essence of defendants' contention to be that plaintiffs' judgment was secured without proper service and, therefore, in personam jurisdiction never attached. While the judge correctly noted he could not vacate the default judgment obtained in Indiana, he was empowered to vacate the domesticated New Jersey judgment under the UEFJA if defendants demonstrated they were denied due process. See id. at 242 (remanding to the trial court for a hearing on the judgment debtor's due process challenge).
A remand is required in this case. Defendants fail to cite any Federal Rule of Civil Procedure that governs service of outof-state defendants in federal court. However, Fed. R. Civ. P. 4(h)(1) provides:
Serving a Corporation, Partnership, or Association. Unless federal law provides otherwise or the defendant's waiver has been filed, a domestic . . . corporation . . . must be served:
(1) in a judicial district of the United States:
(A) in the manner prescribed by Rule 4(e)(1) for serving an individual; or
(B) by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process . . . .
Fed. R. Civ. P. 4(e)(1) provides in turn:
Serving an Individual Within a Judicial District of the United States. Unless federal law provides otherwise, an individual--other than a minor, an incompetent person, or a person whose waiver has been filed--may be served in a judicial district of the United States by:
(1) following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made . . .
The record reveals that on April 21, 2004, Vincent Lorenzo, a licensed process server, delivered plaintiffs' summons and complaint to IHS at 3075 Richmond Terrace, Staten Island, New York. They were served upon "Maryann Southard, Manager." A search from the New York State Department of State reveals that IHS's service and principal business address was 3075 Richmond Terrace, and Vittorio was listed as its chairman or chief executive officer. Another search revealed similar information for Enterprises.*fn3
Vittorio certified, however, that Southward was "working for [his] ex-wife . . . as a secretary." Defense counsel's certification claimed, therefore, that Southard "was not an officer, director, trustee or managing or general agent" of the corporation. If those assertions are true, defendants raised a colorable claim that service was not properly perfected. See Ind. R. Trial P., Rule 4.6(A)(1) (requiring service on a foreign or domestic corporation to be made "upon an executive officer thereof, or if there is an agent appointed or deemed by law to have been appointed to receive service, then upon such agent"); see also Amnay v. Del Labs, 117 F. Supp. 2d 283, 286 (E.D.N.Y. 2000) (interpreting Fed. R. Civ. P. 4(h)(1)(b) and noting that the defendant's contention, and the plaintiff's admission, that process was received by a secretary, not a corporate officer or agent, rendered service improper).
We express no opinion about the ultimate merits of IHS's request. The appellate record reveals that Vittorio had knowledge of plaintiffs' claim before suit was filed in Indiana.*fn4
A letter from the "National Sales Manager" of "Infanti --Customized Furnishing Solutions for the Hospitality and Gaming Industry," located at 3075 Richmond Terrace, Staten Island, to the Blue Chip Casino dated June 16, 2003, confirms a June 13 meeting at which the "defective product and the accident in general" was reviewed. A letter dated October 13, 2003, from Boyd Gaming, operator of the Blue Chip Casino, advised plaintiffs' Indiana counsel that the "CEO and founder" of the manufacturer, "Mr. Vittorio Infanti . . . inspected the . . . stool on June 13, 2003 and declared the chair had a manufacturing defect." IHS's address, phone and fax numbers, were supplied. On October 20, 2003, Indiana counsel served a certified mail, return receipt-requested letter, upon Vittorio at the Richmond Terrace address. The letter advised of plaintiffs' claim. The letter was "refused," but notations on counsel's copy reflect that the "[f]ax went through accepted."
The parties have not briefed the issue of proper service under Fed. Rule Civ. P. 4(h)(1), whether Southard fell within the class of individuals upon whom proper service could be affected, and what effect, if any, Vittorio's prior knowledge of plaintiffs' claims may have upon defendants' due process argument. The judge below did not consider the issues. We leave resolution of those questions for the remand hearing, the conduct of which we leave to the judge's sound discretion.
To the extent the order under review denied defendants the opportunity to vacate the docketed domesticated judgment on due process grounds, we reverse and remand for further proceedings consistent with the procedure set forth in the UEFJA and this opinion.
We were advised at oral argument that Vittorio complied with the order requiring him to submit to plaintiffs' supplementary proceedings. His appeal, in that respect, is moot.
Lastly, defendants' argument that the judge should have transferred venue to the federal court in New York lacks sufficient merit to warrant any extensive discussion in this opinion. R. 2:11-3(e)(1)(E). It suffices to say that the federal action in New York did not involve, and was unrelated to, the allegations made in plaintiffs' complaint. Principles of comity do not apply in such circumstances. Defendants are free to assert any facts revealed in the federal proceeding that may be relevant to consideration of their request to vacate the docketed judgment on due process grounds.
Affirmed in part, reversed in part, and remanded for further proceedings. We do not retain jurisdiction.