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HomeMy WebLinkAbout98-3359 civilBIERD'S WHOLESALE ENGINE EXCH., PLAINTIFF/RESPONDENT V. J.K. PRECISION, DEFENDANT/PETITIONER IN RE: : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA : : : : 98-3359 CIVIL TERM PETITION TO VACATE FOREIGN JUDGMENT OPINION AND ORDER OF COURT Bayley, J,, February 19, 1999:-- On June 16, 1998, pursuant to the Uniform Enforcement of Foreign Judgments Act, 42 Pa.C.S. § 4306, plaintiff, Bierd's Wholesale Engine Exchange filed a foreign judgment in the amount of $5,014.42 against defendant, J.K. Precision. The judgment, which involved an engine plaintiff purchased from defendant, was entered by default against defendant in the Circuit Court for Sauk County, Wisconsin, on March 23, 1998. On November 17, 1998, defendant filed a petition to vacate the judgment claiming that the Circuit Court of Sauk County, Wisconsin did not have personal jurisdiction to enter the default judgment on March 23, 1998. Pursuant to Pa. Rule of Civil Procedure 206.6, a Rule was entered against plaintiff/respondent to show cause why the petition to vacate the foreign judgment should not be granted. The Rule provided that the petition would be decided under Pa. Rule of Civil Procedure 206.7, and the time period for taking depositions was set. Respondent filed an answer with new matter to the petition that petitioner answered. No depositions were taken. The issues were briefed and argued on January 11, 1999. The Uniform Enforcement of Foreign Judgment Act at Section 4306(c)(2) provides: 98-3359 CIVIL TERM Promptly upon the filing of the foreign judgment and the affidavit, the clerk shall mail notice of the filing of the foreign judgment to the judgment debtor at the address given and shall make a note of the mailing in the docket. The notice shall include the name and post office address of the judgment creditor and the attorney for the judgment creditor, if any, in this Commonwealth. In addition, the judgment creditor may mail a notice of the filing of the judgment to the judgment debtor and may file proof of mailing with the clerk. Lack of mailing notice of filing by the clerk shall not affect the enforcement proceedings if proof of mailing by judgment creditor has been filed. (Emphasis added.) Section 4306(b) of the Act provides: Filing and status of foreign judgments.--A copy of any foreign judgment including the docket entries incidental thereto authenticated in accordance with act of Congress or this title may be filed in the office of the clerk of any court of common pleas of this Commonwealth. The clerk shall treat the foreign judgment in the same manner as a judgment of any court of common pleas of this Commonwealth. A judgment so filed shall be a lien as of the date of filing and shall have the same effect and be subject to the same procedures, defenses and proceedings for reopening, vacating, or staying as a judgment of any court of common pleas of this Commonwealth and may be enforced or satisfied in like manner. (Emphasis added.) The Prothonotary did not mail defendant a notice of the filing of the foreign judgment on June 16, 1998. Plaintiff issued a writ of execution on August 17, 1998, without defendant having ever been notified of the entry of the judgment as required by Section 4306(c)(2) of the Foreign Judgment Act. The Prothonotary has never mailed notice of the filing of the judgment to defendant nor has plaintiff ever filed with the Prothonotary proof of the mailing of a notice of the judgment to defendant as authorized by Section 4306(c)(2) of the Act. Notwithstanding, plaintiff maintains in its pleadings that an employee at defendant's place of business signed a certified mail -2- 98-3359 CIVIL TERM receipt on October 14, 1998, that contained a notice of the entry of the foreign judgment four months earlier. Based on that pleading which was answered by defendant, plaintiff maintains that defendant's petition to vacate the judgment that was filed on November 17, 1998, was more than thirty days from October 14, 1998, and violates the Judicial Code at 42 Pa.C.S. Section 5505, titled "Modification of orders," that provides: Except as otherwise provided or prescribed by law, a court upon notice to the parties may modify or rescind any order within 30 days after its entry, notwithstanding the prior termination of any term of court, if no appeal from such order has been taken or allowed. (Emphasis added.) Section 5505 of the Judicial Code applies to court orders. There was no court order in this case; therefore, Section 5505 is not applicable? Jurisdictional challenges can be made in the receiving state to a foreign judgment. Greate Bay Hotel and Casino, Inc. v. Saltzman, 415 Pa. Super. 408 (1992). Under Section 4306(b) of the Foreign Judgment Act, such judgments may be vacated in the same manner as any judgment entered in the court of common pleas. Tandy Computer Leasing v. DeMarco, 388 Pa. Super. 128 (1989). There is no set time limit to file a petition or vacate a foreign judgment. Even if defendant filed its petition to vacate the judgment thirty-four days after notice of the filing was received by its employee, and again we note that proof of the mailing of any notice has not been filed with the prothonotary 1. If a judgment is stricken it becomes a final order under Section 5505 if there is no appeal within thirty days. Hamm v. CRA Security Systems, 95-7095 Civil, Bayley, J., opinion filed January 14, 1997. -3- 98-3359 CIVIL TERM as required by Section 4306(c)(2) of the Foreign Judgment Act, we still have authority to decide a jurisdictional attack on the judgment.2 If personal jurisdiction over defendant did not exist in Wisconsin, then the foreign judgment will not be accorded full faith and credit in Pennsylvania. First Fidelity Bank N.A. New Jersey v. Standard Machine & Equipment, 398 Pa. Super. 607 (1990). Whether to accord full faith and credit to a judgment of another state where the judgment is challenged for lack of personal jurisdiction requires a determination of the jurisdiction of the rendering court by reference to that state's law. Tandy Computer Leasing v. DeMarco, supra. The United States Supreme Court in International Shoe v. State of Washington, 326 U.S. 310 (1945), set forth a two-fold test for formulating the minimum contacts necessary to assert personal jurisdiction: (1) defendant has "certain minimum contacts with the foreign state" and (2) the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." In Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985), the Supreme Court held that jurisdiction over a foreign defendant is proper where the contacts "approximately result from actions by the defendant himself that create a 'substantial 2. As set forth in Tandy Computer Leasing v. DeMarco, supra, a petition to vacate a foreign judgment pursuant to 42 Pa.C.S. Section 4306(b) is not the same as a petition to open a judgment because a foreign judgment cannot be challenged on the merits in the receiving state. The effect of vacating a foreign judgment is the equivalent of striking a judgment, but unlike a petition to strike which is limited to a fatal defect on the face of the record, U.K. LaSalle Inc. v. Lawless, 421 Pa. Super. 496 (1992), a petition to vacate a foreign judgment constitutes the means of challenging the jurisdiction of the court in the rendering state. -4- 98-3359 CIVIL TERM connection' with the foreign state." The minimum contacts must have a basis in "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws." In Worldwide Volkswagen v. Woodson, 444 U.S. 286 (1980), the Supreme Court stated: [i]f the sale of a product of a manufacturer or distributor... is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its products in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or others. The foreign State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the foreign State. (Emphasis added). In Nagel v. Crain Cutter Co., Inc., 184 N.W.2d 876 (Wis. 1971), the defendant was a California corporation with offices only in California. The corporation was not licensed to do business in Wisconsin. The defendant had only one customer in Wisconsin with whom business was carried on by mail. The dispute arose out of a licensing agreement for the sale of goods by defendant between the California corporation and the Wisconsin resident. There were no contacts between the parties within the state of Wisconsin. The Supreme Court of Wisconsin held that the quantity and the nature and quality of contacts were insufficient to find jurisdiction over the California corporation. The Court stated: Defendant has only one customer in Wisconsin, with whom it -5- 98-3359 CIVIL TERM apparently transacts business by mail.., defendant's gross sales to this single customer averaged less than $2,000 annually prior to 1969; in 1969 the gross sales were approximately $4,500... defendant's contacts with Wisconsin have been almost exclusively with a single customer... [and] have been conducted by a mail order arrangement, with defendant sending catalogs to its customer, and the customer ordering defendant's materials by mail. Petitioner, in the case sub judice, argues that it did not have sufficient minimum contacts in the state of Wisconsin for the court in Sauk County to have jurisdiction to enter the default judgment in favor of respondent on March 23, 1998, because: It]he Defendant does not regularly do business or advertise its business in Wisconsin, in fact, this was the first and only time he has ever done business in Wisconsin; Plaintiff initiated the contact with Defendant to request an engine manufactured by Defendant; Defendant's only place of business is in Pennsylvania; the engine was manufactured in Pennsylvania; Defendant owner did not travel to Wisconsin for the purpose of transacting business and the Defendant did not anticipate or promote any future activity in Wisconsin. If these facts were established in this record, we would, based on the foregoing authorities, agree with petitioner that the foreign judgment from Wisconsin would have to be vacated because there was no personal jurisdiction over it in that state. However, Rule of Civil Procedure 206.7(c) provides: If an answer is filed raising disputed issues of material fact, the petitioner may take depositions on those issues, or such other discovery as the court allows, within the time set forth in the order of the court. If the petitioner does not do so, the petition shall be decided on petition and answer and all averments of fact responsive to the petition and properly pleaded in the answer shall be deemed admitted for the purpose of this subdivision. (Emphasis added.) Because petitioner did not take depositions as authorized by the Rule to show -6- 98-3359 CIVIL TERM cause that was issued against respondent pursuant to Pa. Rule of Civil Procedure 206.6, we must decide its petition to vacate the foreign judgment on the petition and answer, and averments of fact responsive to the petition and properly pleaded in the answer are deemed admitted. Petitioner averred in paragraph 12 of its petition to vacate the judgment: The Defendant, J.K. Precision, did not have sufficient minimum contacts with the State of Wisconsin. The Defendant does not regularly do business or advertise its business in Wisconsin, in fact, Plaintiff initiated the contact with Defendant to request an engine manufactured by Defendant. This is the only time Defendant has ever done business in Wisconsin and Defendant only has a place of business in Pennsylvania. (Emphasis added.) Respondent answered Paragraph 12 as follows: Denied. The allegations in Paragraph 12 partially constitute conclusions of law to which no response is required. To the extent the allegations in Paragraph 12 constitute factual allegations, Plaintiff lacks sufficient knowledge to either admit or deny the allegations and therefore the allegations are denied. (Emphasis added.) The first sentence of the averment in paragraph 12 is a conclusion of law, not a fact; therefore, no response was required. Pa. Rule of Civil Procedure 1029(a). The first part of the second sentence is properly denied under Pa. Rule of Civil Procedure 1029(c), that provides, "A statement by a party that after reasonable investigation the party is without knowledge or information sufficient to form a belief as to the truth of an averment shall have the effect of a denial." That part of the second sentence that states "[i]n fact, Plaintiff initiated the contact with Defendant to request an engine manufactured by Defendant," is not denied because respondent knows whether it -7- 98-3359 CIVIL TERM initiated contact with petitioner to buy the engine. Reliance on Rule 1029(c) does not excuse the failure to admit or deny a factual allegation when it is clear that the pleader must know whether a particular allegation is true or false. Cercone v. Cercone, 254 Pa. Super. 381 (1978). The third sentence of paragraph 12 is properly denied because respondent would not know if petitioner had ever done business in Wisconsin or that petitioner only has a place of business in Pennsylvania. In summary, as to the petition and answer, respondent, who is in Wisconsin, has admitted only that it initiated the contact with petitioner, who is in Pennsylvania, to request an engine manufactured by petitioner. Respondent filed new matter to the petition to vacate the foreign judgment, averring: 26. This judgment results from a transaction between the parties within the boundaries of the State of Wisconsin. 27. On or about July 3, 1997, the Plaintiff purchased from Defendant an automotive engine. This engine was shipped from Pennsylvania to Plaintiff in Wisconsin. 28. After Plaintiff received the engine in Wisconsin, the engine was sold to a customer in Wisconsin who installed it in another customer's vehicle, also a resident of Wisconsin. The engine was then used exclusively in Wisconsin. 29. Affer the engine was discovered to be defective while being used in Wisconsin, Defendant shipped yet another engine to Wisconsin for installation and use in Wisconsin. 30. Affer this second engine was discovered to be defective while being used in Wisconsin, a lawsuit was brought against Defendant in Wisconsin for damages resulting from the failure of Defendant's products after being shipped, installed, sold, and used exclusively in the State of Wisconsin. All of these facts are deemed admitted by petitioner pursuant Pa. Rule of Civil -8- Carl C. Risch, Esquire For Plaintiff/Respondent 98-3359 CIVIL TERM Procedure 206.7(c) because petitioner did not take depositions. Accordingly, while the record establishes that respondent initiated the contact with petitioner to request the engine manufactured by petitioner, and that the engine was shipped by petitioner from Pennsylvania to respondent in Wisconsin, petitioner has failed to establish facts in this record whereby we could conclude that the contacts of petitioner in Wisconsin are insufficient such that there was no jurisdiction for the entry of the default judgment in that state. Accordingly, the following order is entered. ORDER OF COURT AND NOW, this ~ ~'l,~'~'day of February, 1999, IT IS ORDERED that the Rule issued against plaintiff/respondent to show cause why the petition of defendant/petitioner to vacate the foreign judgment should not be granted, IS DISMISSED. The petition to vacate the foreign judgment, IS DENIED. Edgar[ I~yley, J..~ Donald L. Jones, Esquire For Defendant/Petitioner ;saa -9-