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Dixie Farms Texaco, Inc. D/B/A Citywide Atm v. Hillside Car Care

December 19, 2011

DIXIE FARMS TEXACO, INC. D/B/A CITYWIDE ATM, PLAINTIFF-RESPONDENT,
v.
HILLSIDE CAR CARE, INC. D/B/A HILLSIDE CAR WASH AND 10 MINUTE OIL CHANGE,
DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. DJ-015817-11.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued November 30, 2011

Before Judges Graves and Harris.

This appeal arises under the Uniform Enforcement of Foreign Judgments Act (UEFJA), N.J.S.A. 2A:49A-25 to -33, and the obligations of federalism pursuant to the Full Faith and Credit Clause, U.S. Const. art. IV, § 1. Defendant Hillside Car Care, Inc. (Hillside) appeals from the denial of its motion in the Law Division to dismiss and void the default judgment obtained by plaintiff Dixie Farms Texaco, Inc. (Dixie) in Texas. We reverse.

I.

On January 16, 2008, Baljit Singh, one of Hillside's principals, signed a two-page document entitled, "ATM Placement Agreement" (the Agreement). The contracting parties were "D.F.T., Inc., a Texas Corporation" (DFT) (designated as the Company) and "Hillside Carwash" (designated as the Merchant).*fn1

The agreement made DFT the exclusive automated teller machine (ATM) service provider at the business premises located at 1260 North Broad Street, Hillside, New Jersey.

The Agreement contained a choice of law and forum selection clause, which stated: § 6.2 This Agreement shall be construed, interpreted, and enforced in accordance with the laws of the State of Texas. The jurisdiction and venue for any legal proceeding shall be in the state and county where the Company (or its successor in interest) maintains its principal place of business or residence.

The Agreement also included the following liquidated damages provisions: § 5.4 The Merchant acknowledges and certifies that any early termination of this Agreement will subject the Company to lost revenue and costs which may be assessed by the Company (or its successor in interest) against the Merchant. The Merchant understands that the damages may not be fixed or may be difficult to fix at the time of termination of this Agreement. Therefore, it is the express intent of the Parties that the Damages the Company may assess shall be calculated as ninety (100%) percent of the Company's average monthly revenue, including other ancillary costs and Damages to the Company as may be shown, projected for the balance of this Agreement, plus costs of suit as the court may adjudge.

Finally, the Agreement granted DFT the right to recover attorneys' fees, along with all costs associated with collection, in the event of a breach: § 5.6 The prevailing Party in a suit between the Merchant and the Company shall be entitled to recover, in addition to costs, such sums as the court may adjudge reasonable for legal fees at trial or proceeding. The Merchant shall also pay for all costs of collection for sums due to the Company under this Agreement, including attorney fees, whether or not suit or legal action is commenced.

In June 2009, Dixie -- not DFT -- filed an original petition in the County Civil Court of Harris County, Texas against "Hillside Carwash, Inc. a/k/a/ Hillside Carwash, LLC." In July 2009, Singh was personally served with a copy of the original petition at Hillside's business premises.

Dixie's pleading claimed that "[i]n May of 2008, [Dixie] entered into an Agreement with Defendant concerning the exclusive placement and processing of an ATM Machine to be located on the premises of Hillside Car Wash, 1260 North Broad Street, Hillside, NJ, 07205." The pleading further asserted that the Agreement was breached when "Defendant . . . refused to allow [Dixie] to enable the ATM machine and has demanded payment from Plaintiff outside the scope of the Agreement." Accordingly, Dixie sought breach of contract damages and attorneys fees.

Hillside retained a New Jersey attorney to represent it in its dispute with Dixie. In October 2009, the attorney informed Dixie's attorney that Hillside was aware of the pending lawsuit but it would not defend the matter until Dixie attempted to enforce a ...


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