New Century Fin. Servs., Inc. v Shaheen
Annotate this CaseDecided on April 30, 2009
Civil Court of the City of New York, Queens County
New Century Financial Services, Inc., Plaintiff(s),
against
Asiya Shaheen, Defendant(s).
100647-08
Devin P. Cohen, J.
The plaintiff moves for summary judgment seeking to enforce a sister State judgment previously awarded to the plaintiff and against the defendant by the State of New Jersey. This case arises from a consumer credit transaction. The plaintiff filed an action against the defendant in New Jersey and obtained a default judgment on December 15, 2003. On or about July 23, 2008, the plaintiff commenced the instant action against the defendant in this court seeking to enforce the New Jersey judgment. The plaintiff now moves for summary judgment on the grounds that no issue of material fact remains for trial because the New Jersey judgment is a valid sister State judgment and is entitled to full faith and credit in New York.
In support of its motion the plaintiff cites the principle that a sister State judgment, even when entered on default, is entitled to full faith and credit, and enforceable, if the rendering court had personal jurisdiction, subject matter jurisdiction and complied with due process requirements(see, Williams v. North Carolina, 317 US 287 [1942]; JDC Fin. Co. I., LP, v. Patton, 284 AD2d 164 [2d Dept 2001]; Cadel Co. v. Triangle & Assoc., 18 AD3d 100 [3d Dept 2005]). In opposing the plaintiff's motion, the defendant submits an affidavit stating that she is not the holder of the debt and that she has never lived at the address in New Jersey where the plaintiff purports to have served the initial summons and complaint. Defendant further offers copies of the police report in which defendant filed a complaint with the Jersey City Police Department asserting that her identity had been stolen, giving the address in question, and notes from the police officer advising that a reverse search had turned up an unrelated man of a different name living at the address.
The Full Faith and Credit Clause requires "recognition of [a] foreign judgment as proof of the prior out-of-State litigation and gives it res judicata effect, thus avoiding relitigation of the issues in one State which have already been decided in another" (Fleet Business Credit, LLC, v. Michael [*2]P. Costelloe, Inc., 19 Misc 3d 29, 2008 NY Slip Op 28076 [2d Dept 2008] quoting Matter of Farmland Dairies v. Barber, 65 NY2d 51, 55 [1985]). Article 54 of the New York CPLR entitled "Enforcement of Judgments Entitled to Full Faith and Credit" provides for an expedited means for enforcing a sister State judgment by filing a copy of the judgment with the County Clerk within the state. Section 5401 defines a foreign judgment as "any judgment, decree, or order of a court of the United States or of any other court which is entitled to full faith and credit in this state, except one obtained by default in appearance..." (emphasis added).
In this case, the New Jersey judgment was entered on default due to the non-appearance of the defendant. Thus, the expedited means for enforcing the foreign judgment was foreclosed. However, CPLR 5406 provides that "[t]he 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 this article, remains unimpaired." In its motion for summary judgment, the plaintiff argues that despite the fact that the New Jersey judgment was entered on default for defendant's non-appearance, it is entitled to full faith and credit, leaving no genuine issue of material fact for trial.
"The United States Supreme Court has held that full faith and credit must be given to a sister State judgment if that judgment is definite and certain and for a specific amount (Barber v. Barber, 21 How [62 US] 582 [1859). But if the judgment is subject to modification by the rendering court, it need not be afforded full faith and credit" (Mittenthal v. Mittenthal, 99 Misc 2d 778, NYS2d 175 [1979] citing Lynde v. Lynde, 181 US 183 [1901], reconciled with Barber v. Barber, supra, in Sistare v. Sistare, 218 US 1 [1910]). While foreign judgments obtained by default in appearance are permitted in the summary judgment context and may be afforded full faith and credit, their exclusion from the expedited means of enforcement under Article 54 is relevant in underscoring New York's policy preference that cases should be decided on the merits (see New York & Presbyt. Hosp. v. Auto One Ins. Co., 2006 NY Slip Op 2509 [2d Dept. 2006]). Generally, "New York courts do not accord full faith and credit to a default judgment because it is not regarded as a disposition on the merits" (All Terrain Properties, Inc. v. Hoy, 265 AD2d 87, 92 [1st Dept 2000]; Callahan v. Certain Underwriters at Lloyds, 2009 NY Slip Op 50984U [2009]).
In this case, the defendant did not appear in the New Jersey action and there is no indication that she served an answer or participated in the litigation in any way prior to the entry of the default judgment. Furthermore, even if the New Jersey action were presumptively entitled to full faith and credit, the defendant's opposition raises the defense of lack of personal jurisdiction in asserting that she never resided at the New Jersey address where the plaintiff purportedly served the original summons and complaint. "A party against whom a default judgment is entered without obtaining jurisdiction over his person may appear and contest its validity or ignore the judgment and assert its invalidity whenever enforcement is attempted" (McMullen v. Arnone, 79 AD2d 492, 499 [2d Dept 1981]. Where personal jurisdiction is not obtained, "the ensuing judgment is ineffective and voidable unless the defendant waives the issue" (Feinstein v. Bergner, 48 NY2d 234, 241 [1979]). Thus, even a judgment presumptively entitled to full faith and credit is subject to attack on jurisdictional grounds.
Upon the foregoing papers, the court determines that the New Jersey default judgment is not entitled to full faith and credit. The plaintiff's answer raises significant issues of fact as to whether personal jurisdiction was obtained in the New Jersey action, as well as with respect to the underlying merits of the case. The plaintiff's motion for summary judgment is denied. [*3]
This constitutes the decision and order of this court.
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