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Ewing Oil, Inc. v. John T. Burnett, Inc.

Superior Court of New Jersey, Appellate Division

June 19, 2015

EWING OIL, INC., Plaintiff-Respondent,
v.
JOHN T. BURNETT, INC., HENRY A. JACKSON and C& H TIRE SERVICE CENTER, INC., Defendants, and ESTATE OF JOHN T. BURNETT,

Submitted March 16, 2015.

Approved for Publication June 19, 2015.

Page 749

On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. DJ-154160-12.

Blumberg & Rosenberg, P.A., attorneys for appellant ( Henry A. Loeb, on the briefs).

Duane Morris, LLP, attorneys for respondent ( Christopher L. Soriano, of counsel and on the brief).

Before Judges LIHOTZ, ST. JOHN and ROTHSTADT.

[441 N.J.Super. 255] OPINION

Page 750

[441 N.J.Super. 256] LIHOTZ, P.J.A.D.

This matter examines the enforceability of a sister-state judgment entered pursuant to a cognovit provision contained in a guaranty agreement against individual guarantors of a corporate debt. Plaintiff, Ewing Oil Co., Inc., a Maryland Corporation, sued John T. Burnett, Inc. (JTB, Inc.), a New Jersey corporation, for payment under a supply agreement. The corporate obligations were unconditionally guaranteed by defendants John T. Burnett, Henry A. Jackson, and C& H Tire Service Center, Inc. (C& H), which collectively operated a retail gasoline service station with JTB, Inc. in Monmouth County.

Page 751

Summary judgment was entered against JTB, Inc. and plaintiff confessed judgment against the guarantors (Maryland judgment). Thereafter, plaintiff initiated an action in New Jersey to record the Maryland judgment for purposes of seeking its enforcement. New Jersey recorded the judgment by default on July 24, 2012.

Burnett's estate (the Estate), through its executrix, moved to vacate the default judgment against Burnett, pursuant to Rule 4:50-1(d), asserting pre-judgment notice was not waived and the judgment's domestication in New Jersey violated due process. The Estate also sought to collaterally attack the judgment, maintaining New Jersey had plenary authority to exercise jurisdiction over its enforcement, pursuant to the contract's forum selection clause.

The Law Division denied the motion and the Estate filed this appeal, reasserting its challenges against New Jersey's recognition of the foreign judgment. Following review of the record and applicable law, we reject these arguments and affirm.

These facts are found in the motion record and are not disputed. On March 18, 2009, plaintiff and JTB, Inc. executed a ten-year commercial supply agreement (CSA), in which plaintiff agreed to supply gasoline and other petroleum products to JTB, Inc. Burnett solely owned JTB, Inc., and Jackson solely owned C& H. [441 N.J.Super. 257] Together the two were partners in the gas station in Monmouth County.

The CSA included several provisions granting plaintiff security for JTB, Inc.'s payment. Aside from a $20,000 deposit to be applied against any outstanding sums owed, plaintiff was granted a security interest in any products or equipment it provided to or installed on the gas station's premises. With respect to the collateral, plaintiff obtained rights of entry and repossession " in addition to all rights and remedies available to [plaintiff] as a secured party under the New Jersey Uniform Commercial Code and as are otherwise available to [it] at law or in equity."

The CSA also contained the following forum selection clause:

This Agreement shall be governed and construed in accordance with the laws of the State of Maryland and the courts of the State of Maryland shall have exclusive jurisdiction over any claims or controversies which arise under this Agreement. However, the courts of the [S]tate of New Jersey shall have jurisdiction in connection with any ...

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