Green Certified Energy Professionals, Inc. v. Insulation Distributors, Inc.

• Court: Court of Appeals of Georgia
• Decided: June 4, 2014
• Docket: A14A0582
• Status: Published

Opinion

FIRST DIVISION PHIPPS, C. J., ELLINGTON, P. J., and MCMILLIAN, J.

NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. http://www.gaappeals.us/rules/

June 4, 2014

In the Court of Appeals of Georgia A14A0582. GREEN CERTIFIED ENERGY PROFESSIONALS, JE-032 INC. v. INSULATION DISTRIBUTORS, INC.

ELLINGTON, Presiding Judge.

Green Certified Energy Professionals, Inc. (“Green”) appeals from an order of

the Superior Court of Gilmer County domesticating a default judgment obtained by

Insulation Distributors, Inc. (“Insulation”) in a Minnesota state court. Green contends

that the superior court erred in domesticating the judgment because Insulation failed

to carry its burden of negating Green’s defense of lack of personal jurisdiction. For

the reasons set forth below, we agree and reverse.

Under the full faith and credit clause of the United States Constitution, the courts of this state will enforce the judgment of a court of another state; such a judgment is res judicata between the parties. When suit is brought in this state to domesticate a foreign judgment, the judgment may be attacked only if the foreign court lacked jurisdiction over the person of the defendant or of the subject matter of the action, or if the judgment was procured by fraud. Generally, if the foreign judgment was obtained by default, no presumption of personal jurisdiction exists, and the burden is on the party seeking to domesticate the judgment to negate the defense of lack of jurisdiction. However, where jurisdictional issues are raised and decided against a litigant in a foreign court, the foreign judgment is given full faith and credit not only as to the merits of the suit but also as to the finding of jurisdiction.

(Citations and punctuation omitted.) Murdock v. Madison River Terminal, 249 Ga.

App. 608, 609-610 (1) (547 SE2d 802) (2001). See also OCGA § 9-12-114 (2) (“A

foreign judgment shall not be recognized if . . . [t]he foreign court did not have

personal jurisdiction over the defendant[.]”) “A trial court’s ruling on a motion to set

aside a judgment will be affirmed if there is any evidence to support that ruling.”

(Citation and punctuation omitted.) Aqua Sun Investments v. Kendrick, 240 Ga. App.

671, 673 (2) (524 SE2d 519) (1999).

The appellate record shows as follows. On or about November 29, 2012,

Insulation sued Green and Charles D. Chastain in the State of Minnesota, Carver

County District Court, to collect on a debt. On December 6, 2012, Insulation served

Chastain and attempted to serve Green by personally delivering suit papers to

Chastain in North Carolina. On December 6, Chastain was neither an officer of nor

2 the registered agent for Green. Although Chastain had previously served in both

capacities, the records of the Secretary of State of Georgia showed that, as of August

17, 2012, Chastain was no longer an officer or registered agent of the corporation.

Rather, Green’s corporate filings showed that it could be served at its corporate

headquarters in Ellijay. There is no evidence in the record that Insulation made any

other effort to perfect service upon Green. The Minnesota court entered a default

judgment in Insulation’s favor on April 17, 2013.

On May 30, 2013, Insulation filed the instant motion to domesticate the

Minnesota judgment. Green filed a response, asking the court to refuse to recognize

the judgment on the ground that service upon it had never been perfected.1 After

reviewing the record and briefs of the parties, the court entered an order

domesticating the judgment. In reaching its decision, the court acknowledged that it

1 “With regard to relief from such a judgment, the proper method for attacking a foreign judgment filed in Georgia under the [Uniform Enforcement of Foreign Judgments Law] is a motion to set aside under OCGA § 9-11-60 (d).” (Citation and punctuation omitted.) Noaha, LLC v. Vista Antiques & Persian Rugs, 306 Ga. App. 323, 326 (1) (702 SE2d 660) (2010). OCGA § 9-11-60 (d) (1) provides, in pertinent part, that a judgment may be collaterally attacked based upon “lack of jurisdiction over the person[.]” Green’s motion was not styled as a motion to set aside a judgment pursuant to OCGA § 9-11-60 (d); however, because that was essentially the substance of the motion, we will treat it as such. See Kuriatnyk v. Kuriatnyk, 286 Ga. 589, 589- 590 (690 SE2d 397) (2010) (in pleadings, substance controls over nomenclature).

3 lacked information concerning whether the issue of service of process had been raised

and litigated in the Minnesota court. Without reference to Minnesota law, the court

concluded that, since service had “attached” to Chastain, who had “previously” been

Green’s registered agent, Green presumably had knowledge of the suit and, thus, had

an opportunity to litigate the case in Minnesota if it had wished to do so.

The record before us does not contain any of the pleadings filed by the parties

in the Minnesota action, so it does not show whether Green litigated the issue of lack

of personal jurisdiction. However, in its final judgment, the Minnesota court found

as a matter of fact that Green had filed “[n]o answer or other appearance.” Further,

although the Minnesota court found that a copy of the summons and complaint had

been served upon Green, it did not specify how service had been perfected. Based

upon these and other findings of fact, the court entered a default judgment against

Green. Because the Minnesota court entered a default judgment against Green, no

presumption of personal jurisdiction exists. Insulation, as the party seeking to

domesticate the judgment, has the burden of negating Green’s defense of lack of

jurisdiction and of establishing that, pursuant to Minnesota law, service upon Green

had been perfected such that the Minnesota court had acquired personal jurisdiction

over it. Murdock v. Madison River Terminal, 249 Ga. App. at 609-610 (1).

4 Minnesota Rule of Civil Procedure 4.03 (c) provides, in pertinent part, that

service upon a corporation may be made by “delivering a copy [of the summons and

complaint] to an officer or managing agent, or to any other agent authorized expressly

or impliedly or designated by statute to receive service of summons.” The Supreme

Court of Minnesota has held that service of process in a manner not authorized by

Rule 4 is ineffective. Duncan Electric Co., Inc. v. Transdata, Inc., 325 NW2d 811,

812 (Minn. 1982) (service of process upon an individual without express or implied

authority to receive service was ineffective under Rule 4). Although, under Minnesota

law, rules governing service are liberally construed when the intended recipient had

prompt, actual notice of the lawsuit, Larson v. Hendrickson, 394 NW2d 524, 526

(Minn. Ct. App. 1986), actual notice will not subject a defendant to personal

jurisdiction absent the plaintiff’s substantial compliance with Rule 4. Thiele v. Stich,

425 NW2d 580, 584 (III) (Minn. 1988). Moreover, this actual notice exception “has

been recognized only in cases involving substitute service at the defendant’s

residence.” (Citation omitted). Id. Finally, “[i]n order for one to be an agent expressly

or impliedly authorized to receive service under Rule 4.03(c), it is first necessary that

there be an actual agency relationship.” (Citations and punctuation omitted.) Winkel

5 v. Eden Rehabilitation Treatment Facility, Inc., 433 N.W.2d 135, 139 (Minn. App.

1988).

In this case, there is no evidence in the record from which the superior court

could infer that Chastain had an agency relationship with Green at the time process

was served, that Chastain was expressly or impliedly authorized to receive service of

process on Green’s behalf, that Insulation substantially complied with Minn. R. Civ.

P. 4.03 (c), or that Green had actual knowledge of the Minnesota suit. Given the

record in this case, we must conclude that Insulation failed to sustain its burden of

negating Green’s jurisdictional defense. See Murdock v. Madison River Terminal,

249 Ga. App. at 609-610 (1); OCGA § 9-12-114 (2). Consequently, the court erred

in denying Green’s motion to set aside and in domesticating the foreign judgment.

Judgment reversed. Phipps, C. J., and McMillian, J., concur.