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Home My WebLink About2004-3034 Civil FRONTIER LEASING CORPORATION,: IN THE COURT OF COMMON PLEAS OF PLAINTIFF CUMBERLAND COUNTY, PENNSYLVANIA V. SHREEJI, INC. and SHILPA PATEL, DEFENDANTS V. COMMERCE BANK, GARNISHEE 04-3034 CIVIL TERM IN RE: PETITION TO VACATE FOREIGN JUDGMENT BEFORE BAYLEY, J. OPINION AND ORDER OF COURT Bayley, J., June 27, 2005:-- On September 8, 2000, defendant, Shilpa K. Patel, signed a lease as President of defendant, Shreeji, Inc., for an ATM machine from Liberty Leasing Company, a division of Commercial Federal Bank. The lease, which was assigned by Liberty Leasing to plaintiff, Frontier Leasing Corporation, is for $289 a month for 49 months. Paragraph 8 of the lease provides: Remedies: If you are in default, we can require that you pay the remaining balance of this Lease, which is the present value of all future rents due under this lease discounted at a rate equal to discount rate of Federal Reserve Bank of Kansas City as of the date of the judgment plus 1 %, and return the equipment to us. We can also use any of the remedies available to us under the Uniform Commercial Code or any other law. You agree that this Lease shall be performed by lessee in Des Moines, Polk County, Iowa, and any suit on this lease shall be proper if filed in Des Moines, Polk County, Iowa. If we refer this Lease to an attorney for collection, you agree to pay our reasonable attorney's 04-3034 CIVIL TERM fees and actual costs. If we have to take possession of the equipment, you agree to pay the cost of repossession and storage. You agree that we will not be responsible to pay you any consequential or incidental damages for any breach by us under the Lease. (Emphasis added.) Paragraph 5 of the lease provides: Applicable Law: YOU AGREE THAT THE LAWS OF IOWA WILL APPL Y TO THIS LEASE. On the same document, Shilpa K. Patel signed the following individual Guaranty: I guarantee that the LesseelCustomer will make all payments and pay all other charges required under the Equipment Lease Agreement when they are due and will perform all other obligations under the Equipment Lease Agreement fully and promptly. If the LesseelCustomer defaults, I agree to be bound by, and will immediately pay, in accordance with the provisions of the Equipment Lease Agreement all sums due under the original terms of the Equipment Lease Agreement. I will reimburse you for all expenses you incur in enforcing any of your rights against the LesseelCustomer or myself, including attorney's fees. This guaranty is unconditional and will not be affected by your renewing, extending, or modifying the underlying lease with the Lessee, nor do you need to sue the lessee first, and we waive notice of acceptance, presentment, demand, protest and notice of nonpayment by Lessee. Shilpa Patel executed the lease and guaranty in Pennsylvania in the presence of a Philadelphia representative of the lessor. Pursuant to the lease, the ATM machine was delivered and utilized in Pennsylvania. Shilpa Patel has never been to Iowa and has had no contact with anyone in Iowa. On April 20, 2004, Frontier Leasing Corporation obtained a default judgment against Shreeji, Inc., and Shilpa Patel in the Iowa District Court for Polk County. A judicial order was entered stating that the court had jurisdiction over Shreeji, Inc., and Shilpa Patel, and that the lessee was in default of its obligations under to the lease. A -2- 04-3034 CIVIL TERM default judgment in the amount of $17,512.92, plus interest, was entered against Shreeji, Inc., and Shilpa Patel as guarantor. On June 29,2004, the judgment from Iowa was entered in Cumberland County against Shreeji, Inc., and Shilpa Patel. Plaintiff garnished a personal account of Shilpa Patel in Commerce Bank in Carlisle. On July 15, 2004, Shilpa Patel filed a petition to vacate the judgment, claiming that it should not be accorded full faith and credit in Pennsylvania because the court in Iowa lacked personal jurisdiction over her. A Rule to show cause was entered which was answered by plaintiff with new matter. Patel replied to the new matter and a hearing was conducted on June 17, 2005. Whether the court in Iowa had personal jurisdiction over Shilpa Patel requires due process under the 14th Amendment. Due process requires that the defendant have sufficient contacts with the forum such that granting jurisdiction would not offend traditional notions of fair play and substantial justice. See International Shoe Co. v. Washington, 326 U.S. 310(1945). The Superior Court of Pennsylvania set forth in J.C. Snavely & Sons, Inc. v. Springland Associates, Inc., 411 Pa. Super 1 (1991): Random, fortuitous or attenuated contacts do not constitute the requisite minimum contacts. Nor will the existence of a contract with an out of state party, alone, suffice to establish jurisdiction. The court must consider whether the defendant should reasonably anticipate being haled into court as a result of conduct and connections with the forum state. It is critical that the defendant avail himself of the privilege of conducting activities in the forum state and that it is not merely the result of unilateral activity on the part of a third person or another party. (Emphasis added.) (Citations omitted.) The evidence in this case clearly shows that the court in Iowa did not have the requisite -3- 04-3034 CIVIL TERM minimum contact with Shilpa Patel to exercise general personal jurisdiction over her. Alternatively, plaintiff maintains that the terms of the Guaranty conferred specific personal jurisdiction of the Iowa Court over Shilpa Patel. In J.C. Snavely & Sons, Inc., a Pennsylvania Corporation with its principal place of business in Landisville, Pennsylvania, entered into an agreement to supply building materials to Springland Associates, Inc., a Delaware Corporation with its principal place of business in New York. The Vice President of Springland Associates, Inc., Charles Knapp, a resident of New York, signed as personal guarantor to a credit agreement between the companies. Knapp visited the Snavely & Sons factory in Pennsylvania two or three times to evaluate the product for his employer. There were no further contacts between Knapp and Pennsylvania. After concluding that there were insufficient minimum contacts to exercise general personal jurisdiction over Charles Knapp, the Superior Court stated: Additionally, there exits no support for a finding of specific jurisdiction. The guaranty between Mr. Knapp and appellant constitutes a separate and independent contract. (Citation omitted.) In the case sub judice, the Guaranty, unlike the lease, does not contain a consent to be sued in Iowa. Notwithstanding, plaintiff argues that the following provision in the separate Guaranty that Patel signed constitutes her agreement to subject herself to a suit in Iowa: If the LesseelCustomer defaults, I agree to be bound by, and will immediately pay, in accordance with the provisions of the Equipment Lease Agreement all sums due under the original terms of the Equipment Lease Agreement. -4- 04-3034 CIVIL TERM While the Guaranty provides that Patel pay all sums due in accordance with the provisions of the equipment lease, it does not incorporate the Remedies provision in Paragraph 8 of the lease. Accordingly, there being no provision in the Guaranty whereby Patel consented to personal jurisdiction in Iowa, there was no specific personal jurisdiction over her. For the foregoing reasons, the judgment entered against Shilpa Patel in Iowa will not be afforded full faith and credit in Pennsylvania.1 ORDER OF COURT AND NOW, this day of June, 2005, the judgment entered against defendant, Shilpa Patel, at No. 04-3034, IS STRICKEN. By the Court, Edgar B. Bayley, J. Brian R. Elias, Esquire Union Meeting Corporate Center V 925 Harvest Drive Blue Bell, PA 19422 For Plaintiff Carl C. Risch, Esquire Ten East High Street Carlisle, PA 17013 For Shilpa Patel Timothy A. Hay, Esquire 1 This resolution makes it unnecessary to decide plaintiff's claim for attorney fees and expenses. -5- 04-3034 CIVIL TERM 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110 For Garnishee :sal -6- FRONTIER LEASING CORPORATION,: IN THE COURT OF COMMON PLEAS OF PLAINTIFF CUMBERLAND COUNTY, PENNSYLVANIA V. SHREEJI, INC. and SHILPA PATEL, DEFENDANTS V. COMMERCE BANK, GARNISHEE 04-3034 CIVIL TERM IN RE: PETITION TO VACATE FOREIGN JUDGMENT BEFORE BAYLEY, J. ORDER OF COURT AND NOW, this day of June, 2005, the judgment entered against defendant, Shilpa Patel, at No. 04-3034, IS STRICKEN. By the Court, Edgar B. Bayley, J. Brian R. Elias, Esquire Union Meeting Corporate Center V 925 Harvest Drive Blue Bell, PA 19422 For Plaintiff 04-3034 CIVIL TERM Carl C. Risch, Esquire Ten East High Street Carlisle, PA 17013 For Shilpa Patel Timothy A. Hay, Esquire 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110 For Garnishee :sal -2-