LLC v. LLC (2012)

MEMORANDUM OF DECISION

The sole issue presented in this matter is whether the defendant has satisfied its burden of proving that a default judgment rendered against the defendant by the Circuit Court of Milwaukee County, Wisconsin, is not entitled to full faith and credit in Connecticut because the Wisconsin court lacked personal jurisdiction.   The defendant has failed to meet this burden and, accordingly, judgment should be rendered in favor of the plaintiff.

The controversy before the court is an action to enforce a foreign default judgment.   The relevant facts are as follows.   On June 23, 2010, the plaintiff, Ethostream, LLC, a Wisconsin entity, obtained a $85,783.39 default judgment against the defendant, Allied Communication, LLC, a Connecticut entity, in the Circuit Court of Milwaukee County, Wisconsin.   The Wisconsin judgment recited that the defendant had been served, that more than twenty days had elapsed since such service and no answer or other responsive pleading had been filed by the defendant.   Thereafter, on November 23, 2010, the plaintiff instituted the present lawsuit in order to enforce the Wisconsin judgment in Connecticut.   After the plaintiff filed a complaint alleging that the judgment had not been paid, the defendant attacked the judgment by asserting in a special defense that the Wisconsin court lacked personal jurisdiction in that proceeding.

The case was assigned for a court trial to be held on December 8, 2011.   On that day, the court received, without objection, evidence from the plaintiff that included the following documents from the Wisconsin proceeding:  (1) the plaintiff's complaint in the Wisconsin action and the exhibits attached to it;  (2) the affidavit of service upon the defendant;  (3) the plaintiff's motion for default judgment;  and (4) the Wisconsin court's order for judgment.   In addition, the parties represented to the court that the only issue to be tried is whether the Wisconsin court lacked personal jurisdiction, that they would not call upon any witnesses to testify in the action and that they would present their arguments to the court in briefs to be filed on a later date.

In its post-trial memoranda, the plaintiff argues that it is entitled to enforcement of the Wisconsin judgment on the basis of the full faith and credit clause of article four, § 1, of the United States constitution.   The plaintiff acknowledges that the full faith and credit obligation owed to a foreign judgment may be nullified upon a showing that the court that rendered the judgment lacked personal jurisdiction.   Even so, the plaintiff asserts that the burden at trial to prove lack of personal jurisdiction rests not on the plaintiff but on the party attacking jurisdiction.

The defendant, in its memoranda, does not challenge the plaintiff's characterization of the appropriate burden of proof.   Yet, the defendant elected not to submit any evidence to the court to disprove jurisdiction.   Rather, relying solely on the evidence submitted by the plaintiff, the defendant argues that (1) the affidavit of service in the Wisconsin action reveals that the service upon the defendant was improper;  (2) the plaintiff's Wisconsin complaint did not allege facts satisfying Wisconsin's long-arm statute or federal due process requirements;  and (3) the Wisconsin court did not expressly find that it had personal jurisdiction over the defendant.

It is instructive to set forth the legal principles governing the domestication of foreign default judgments in Connecticut.   To be certain, the plaintiff seeks enforcement of a foreign default judgment on the basis of the constitutional precept of full faith and credit and not on the basis of the Uniform Enforcement of Foreign Judgments Act, General Statutes § 52–604 et seq.¹  Although the act “provides a simplified procedure to enforce foreign judgments not obtained by default ․ General Statutes § 52–607 ² provides that, notwithstanding the provisions of that act, ‘[t]he right of a judgment creditor to proceed by an action on the judgment ․ remains unimpaired.’  “ Maltas v. Maltas, 298 Conn. 354, 357 n.3, 2 A.3d 902 (2010).   Thus, “ § 52–607 authorizes a foreign judgment creditor to seek the enforcement of a judgment in this state even if that judgment was entered by default in the foreign state.”  Regents of the University of California v. Gold Marketing, LLC, 92 Conn.App. 378, 379, 885 A.2d 201 (2005);  see also Tri–State Tank Corp. v. Higganum Heating, Inc., 45 Conn.App. 798, 802, 699 A.2d 201 (1997) (“[w]hile default judgments are specifically excluded from the definition of ‘foreign judgments' under [the act] ․ § 52–607 preserved the common-law right of a judgment creditor to bring an independent action on the judgment” [internal quotation marks omitted] ).

The full faith and credit clause of the United States constitution provides that “Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state.”   U.S. Const., art.   IV, § 1. “The very purpose of the full faith and credit clause was to alter the status of the several states as independent foreign sovereignties, each free to ignore obligations created under the laws or by the judicial proceedings of the others, and to make them integral parts of a single nation throughout which a remedy upon a just obligation might be demanded as of right, irrespective of the state of its origin.”  Milwaukee Country v. M.E. White Co., 296 U.S. 268, 276–77, 56 S.Ct. 229, 80 L.Ed. 220 (1935).  “As a matter of federal law, the full faith and credit clause requires a state court to accord to the judgment of another state the same credit, validity and effect as the state that rendered the judgment would give it.”  Packer Plastics, Inc. v. Laundon, 214 Conn. 52, 56, 570 A.2d 687 (1990).

“Only in a select few situations may courts set aside their obligation to afford full faith and credit to final judgments of foreign courts.”   Business Alliance Capital Corp. v. Fuselier, 88 Conn.App. 731, 736, 871 A.2d 1051 (2005).   In particular, our Supreme Court has recognized “the proposition that lack of jurisdiction renders a foreign judgment void ․ A party can therefore defend against the enforcement of a foreign judgment on the ground that the court that rendered the judgment lacked personal jurisdiction, unless the jurisdictional issue was fully litigated before the rendering court or the defending party waived the right to litigate the issue.”  (Citations omitted.)  Packer Plastics, Inc. v. Laundon, supra, 214 Conn. 56;  see also Seaboard Surety Co. v. Waterbury, 38 Conn.Sup. 468, 472, 451 A.2d 291 (1982) (action preserved by § 52–607 “allows the debtor to attack collaterally the foreign judgment by establishing facts that would render the foreign judgment void”).   Whenever a jurisdictional defense is raised, “[t]he question of whether another state's court properly exercised personal jurisdiction is determined with reference to the law of that state.”  Maltas v. Maltas, supra, 298 Conn. 367.

While the obligation to give full faith and credit to a foreign judgment may be defeated on jurisdictional grounds, our Supreme Court has underscored that “the judgment of another state must be presumed valid, and the burden of proving a lack of jurisdiction rests heavily upon the assailant.”  (Emphasis added;  internal quotation marks omitted.)  Packer Plastics, Inc. v. Laundon, supra, 214 Conn. 57.  Packer Plastics involved a default judgment rendered by a trial court in the state of Kansas.  Id., 53.   When the plaintiff sought to enforce the Kansas judgment in Connecticut, the defendant raised a special defense asserting that the Kansas judgment was void for lack of personal jurisdiction.  Id., 54.   At trial, however, neither the plaintiff nor the defendant offered any evidence on the issue of whether the Kansas court had jurisdiction over the defendant.  Id. In upholding the trial court's judgment for the plaintiff, our Supreme Court held that “the party attacking the [foreign] judgment bears the burden of proof regardless of whether the judgment at issue was rendered after a full trial on the merits or after an ex parte proceeding”;  id., 57;  and, consequently, “the defendant's failure to present any evidence in support of his challenge to the Kansas court's jurisdiction entitled the plaintiff to judgment in its favor.”   Id.

The defendant in this case similarly has not presented any evidence to prove that the Wisconsin court lacked personal jurisdiction.   Furthermore, the defendant's reliance on the particular documents submitted by the plaintiff does not defeat the presumption of jurisdictional validity owed to the Wisconsin judgment.   To begin, while the defendant claims that the affidavit of service from the Wisconsin action reveals improper service of process;  see Maltas v. Maltas, supra, 298 Conn. 367 (“adequate service of process is necessary for a state to obtain jurisdiction over an out-of-state party”);  the affidavit, in actuality, proves no such improprieties.   In the affidavit, the process server, Daniel Russbach, testified that he served the defendant at “560 Saw Mill Road, West Haven, CT 06516” by delivering a copy of the process to Edson Venicio, who is employed by the defendant as a “network administrator.”   Russbach further testified that Venicio answered “in the affirmative” when asked whether he was authorized to accept service on behalf of the defendant.   According to Wisconsin law, a foreign limited liability company may be served “[b]y personally serving the summons upon an officer, director or managing agent of the corporation or limited liability company either within or without this state.   In lieu of delivering the copy of the summons to the officer specified, the copy may be left in the office of such officer, director or managing agent with the person who is apparently in charge of the office.”   Wis. Stat. § 801.11(5)(a).   The defendant's basic contention is that the service of process did not comply with § 801.11(5)(a), because the affidavit “does not indicate that Edson Venicio was the person in charge of the defendant's office.”   This argument misses the mark because § 801.11(5)(a) did not require delivery of the process to such a person.   Instead, the statute authorized delivery of the process to a person who was “apparently” in charge of the office, which determination was entirely dependent on the reasonable perception of the process server.   See Horrigan v. State Farm Ins. Co., 106 Wis.2d 675, 683, 317 N.W.2d 474 (1982) (service complied with statute where “the perception of the process server that he had served the person ‘apparently in charge of the office’ was reasonable”);  see also Keske v. Square D Co., 58 Wis.2d 307, 313, 206 N.W.2d 189 (1973) (“[t]he use of the word ‘apparently’ [in the statute] can only refer to what is apparent to the person actually serving the summons”).   In assessing reasonableness in this context, the Supreme Court of Wisconsin has stated that “[t]he exact identity and job title of the person upon whom service was made is not critical to the issue of whether that person was apparently in charge.”  Horrigan v. State Farm Ins. Co., supra, 683.   Rather, “[w]hen a person appears in response to a request for someone who may be served with legal process, it will normally be reasonable for the process server to serve that person.”  Id., 684.   Therefore, the affidavit indicates that when Venicio informed Russbach that he could accept service on behalf of the defendant and in fact did so, it was reasonable for Russbach, in compliance with § 801.11(5)(a), to deliver the process to him.   The defendant, moreover, has not provided any evidence disproving the reasonableness of Russbach's act.

The defendant's next contention, that the plaintiff's complaint from the Wisconsin action did not allege facts satisfying Wisconsin's long-arm statute or federal due process requirements, is a nonstarter.   It is true that “[w]hether Wisconsin courts have jurisdiction over a non-resident defendant is two-fold ․ First, the non-resident's contacts with Wisconsin must be determined under Wisconsin's long-arm statute ․ Second, if the long-arm statute extends to the defendant, we must determine whether the exercise of jurisdiction comports with [federal] due process requirements ․ The due process clause of the Fourteenth Amendment requires that defendants must have certain minimum contacts with the state, such that the lawsuit does not offend ‘traditional notions of fair play and substantial justice.’  “ (Citations omitted.)  Landreman v. Martin, 191 Wis.2d. 787, 798, 530 N.W.2d 62 (Wis.App.1995).   In the present case, however, it is not necessary to determine the jurisdictional sufficiency of the plaintiff's allegations.   The Wisconsin complaint alleged that the parties entered into a contract under which the plaintiff provided material and services to the defendant in connection with the defendant's “delivery of a comprehensive voice and data solution” to a condominium in Florida, and the defendant subsequently failed to pay the amount due under the contract.   A copy of that contract, signed by the president of the defendant LLC, was appended to the complaint ³ as an exhibit and contained the following consent to jurisdiction provision:  “The Parties, and any person or persons claiming on behalf of the Parties, hereby submit to the personal jurisdiction of the state courts of the State of Wisconsin for purposes of any and all dispute resolutions, as set forth herein.”  “In Wisconsin, courts may obtain personal jurisdiction over a party through any one or more of the grounds stated in Wisconsin's long-arm statute ․ or by consent.”  (Citations omitted.)  Kohler Co. v. Wixen, 204 Wis.2d 327, 336, 555 N.W.2d 640 (Wis.App.1996).   Moreover, where consent to jurisdiction provisions “have been obtained through freely negotiated agreements and are not unreasonable and unjust ․ their enforcement does not offend due process.”   (Citation omitted;  internal quotation marks omitted.)  Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 n.14, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (explaining that “because the personal jurisdictional requirement is a waivable right, there are a variety of legal arrangements by which a litigant may give express or implied consent to the personal jurisdiction of the court” [internal quotation marks omitted] ).  “Therefore, consent to jurisdiction clauses are enforceable in Wisconsin.”  Datronic Rental Corp. v. DeSol, Inc., 164 Wis.2d 289, 292, 474 N.W.2d 780 (Wis.App.1991).   Because the defendant has not disputed the existence, authenticity or applicability of this particular consent to jurisdiction provision, which conferred upon Wisconsin the power to validly exercise jurisdiction over the defendant, it is inconsequential here whether the plaintiff's allegations complied with Wisconsin's long-arm statute or with the relevant standards of federal due process.

Lastly without merit is the defendant's assertion that the Wisconsin court did not make an express jurisdictional finding and therefore it was without jurisdiction.   The Wisconsin judgment's silence as to jurisdiction has no bearing on whether jurisdiction was in fact lacking.   To the contrary, the plaintiff has presented evidence that the defendant consented to the jurisdiction of Wisconsin.   Certainly this imprimatur of jurisdiction cannot be defeated by a mere showing that the Wisconsin court failed to make a jurisdictional pronouncement in its judgment.

Based on the foregoing, the defendant has not satisfied its burden to prove that the Wisconsin court lacked personal jurisdiction.   Thus, the Wisconsin judgment is entitled to full faith and credit in this state in accordance with article IV, § 1, of the United States constitution.

David W. Skolnick

Judge Trial Referee

FOOTNOTES

FN1. Under the act, foreign judgments not obtained by default shall be treated in the same manner as a judgment of a court of this state if the judgment creditor complies with certain filing and mailing requirements.   See General Statutes §§ 52–604, 52–605..  FN1. Under the act, foreign judgments not obtained by default shall be treated in the same manner as a judgment of a court of this state if the judgment creditor complies with certain filing and mailing requirements.   See General Statutes §§ 52–604, 52–605.

FN2. Section 52–607 provides:  “The right of a judgment creditor to proceed by an action on the judgment or a motion for summary judgment in lieu of complaint instead of proceeding under sections 52–604 to 52–609, inclusive, remains unimpaired.”.  FN2. Section 52–607 provides:  “The right of a judgment creditor to proceed by an action on the judgment or a motion for summary judgment in lieu of complaint instead of proceeding under sections 52–604 to 52–609, inclusive, remains unimpaired.”

FN3. A copy of the contract was also submitted by the plaintiff, without objection from the defendant, as an independent exhibit in the present action..  FN3. A copy of the contract was also submitted by the plaintiff, without objection from the defendant, as an independent exhibit in the present action.

Skolnick, David W., J.T.R.