Andre v. Morrow

• Decision Date: 13 April 1984
• Docket Number: No. 14843,14843
• Parties: Robert W. ANDRE, Conservator of the Estate of Beatrice Morrow, Conservatee, Plaintiff-Respondent, v. Kenneth C. MORROW and Billie Jo Morrow, Defendants-Appellants.
• Court: Idaho Supreme Court

Page 1355

680 P.2d 1355

106 Idaho 455

Robert W. ANDRE, Conservator of the Estate of Beatrice Morrow, Conservatee, Plaintiff-Respondent, v. Kenneth C. MORROW and Billie Jo Morrow, Defendants-Appellants.

No. 14843.

Supreme Court of Idaho.

April 13, 1984.

William H. Foster, Grangeville, for defendants-appellants

Theodore O. Creason, Lewiston, for plaintiff-respondent.

DONALDSON, Chief Justice.

Plaintiff-Respondent (Andre) brought an action in California against defendants-appellants (Morrows) contending that the Morrows had committed a fraud on Andre's conservatee, Beatrice Morrow. Andre requested the California court to impose a constructive trust on certain real property located in Idaho, in which the Morrows held legal title and which they had allegedly acquired with the proceeds of the fraud.

On June 13, 1979, while the California case was still pending, Andre filed a complaint in Idaho County district court based on the identical allegations contained in the California action. Andre requested the Idaho court to also recognize the existence of a constructive trust in the Idaho property.

After a full trial, the California court rendered judgment on June 20, 1979, for Andre, awarding him compensatory and punitive damages, and imposing a constructive trust on the Idaho property. The Morrows did not appeal this decision.

On June 27, 1979, Andre filed a copy of the June 20, 1979, California judgment with the Clerk of the District Court for Nez Perce County, Idaho, pursuant to the Enforcement of Foreign Judgments Act, I.C. §§ 10-1301-1308. The Nez Perce action was commenced to enforce the constructive trust imposed by the California decree.

On July 12, 1979, the California Court issued a Minute Order which ordered that the June 20, 1979 judgment be deemed entered on July 12, 1979. The June 20, 1979 judgment was apparently prematurely entered by the clerk of the court. A new document was not issued to replace the June 20, 1979 judgment, but rather the June 20th judgment received a new entry date.

On December 12, 1979, Andre amended his Idaho County complaint to include Count XII, which stated that the California judgment had been entered in his behalf. On this basis, Andre requested the Idaho County court to adopt the California judgment and enforce the equitable decree contained therein. On February 29, 1980, Andre filed a motion for summary judgment in Idaho County, contending the California judgment should be given full faith and credit in Idaho, and requesting the Idaho court to transfer title to the Idaho property to Andre. On May 28, 1980, the Idaho County action and the Nez Perce County action were consolidated.

In September, of 1980, the Morrows filed for a Chapter XIII bankruptcy. The Bankruptcy Court vacated the automatic stay On May 26, 1981, Andre renewed his motion for summary judgment, requesting the court to grant full faith and credit to the California judgment. On February 12, 1982, the Idaho County district court heard Andre's motion for summary judgment and the Morrows' motion to dismiss. The court denied the motion to dismiss, and held that the issue of full faith and credit had already been litigated in the Bankruptcy Court, and the judgment therein precluded relitigation of the validity of the California judgment. Thus, full faith and credit was given to the California judgment which the court held was entered on July 12, 1979, the effective day of the judgment. The court further held that the issue of when the Idaho property became impressed with the constructive trust had not been fully briefed, and allowed this issue to be resubmitted with additional briefing.

order to allow the Idaho action, based on the California judgment, to proceed. On April 10, 1981, the Bankruptcy Court concluded that the California judgment was entitled to full faith and credit in the bankruptcy court and in the Idaho state courts, and "that to the extent the California Judgment create[d] a constructive trust upon the property in Idaho, as determined by the Idaho state court," the Bankruptcy Court would recognize and honor such a trust.

On November 10, 1982, the Idaho County district court determined that the constructive trust arose in the Idaho property at the time the Morrows acquired the property. The judge ordered the Morrows to convey the property to Andre. When the Morrows failed to comply with this order, the court amended the summary judgment and vested all interest in and title to the Idaho property in Andre. The Morrows have appealed.

I.

The thrust of this appeal is whether the California judgment is entitled to full faith and credit in Idaho. However, this appeal was taken from the Idaho County district court's order which granted "res judicata" effect to the Bankruptcy Court's order. We first examine whether the Idaho court erred in granting "res judicata" to the Bankruptcy Court decree. ¹

The Idaho court held that

"[t]he issue of whether the California court's judgment should be given full faith and credit in the Idaho courts was litigated in the bankruptcy court and both parties submitted extensive briefing to the bankruptcy judge on this point. The bankruptcy court decided this issue as stated above, and that issue should not be relitigated in this court. The principal of res judicata will be applied."

The doctrine of res judicata generally prevents the relitigation of matters which have proceeded to a final conclusion between the parties to the litigation or their privies. Shea v. Bader, 102 Idaho 697, 638 P.2d 894 (1981); Idaho State University v. Mitchell, 97 Idaho 724, 552 P.2d 776 (1976); One of the necessary prerequisites to granting full faith and credit, is that the rendering court must have had valid jurisdiction. (See Part II.A(1)., infra.) Appellant asserted, both before the district court and now on appeal, that the California court lacked jurisdiction or competence to render a judgment directly affecting title to real estate in Idaho. However, by granting res judicata effect to the issue of the validity of the California decree, appellant was prevented from litigating in the Idaho courts, whether the California court indeed had jurisdiction. This result is contrary to our holding in Wright v. Atwood, 33 Idaho 455, 195 P. 625 (1921), wherein we held that:

Gaige v. City of Boise, 91 Idaho 481, 425 P.2d 52 (1967). Thus, when the Idaho court applied res judicata to the issue of whether the California judgment was entitled to full faith and credit, the litigants were foreclosed from relitigating this issue.

"[A] judgment by a tribunal without authority, or which exceeds or lies beyond its authority, is necessarily void, and may be shown to be so in collateral proceedings, even though it be a court of general jurisdiction, because no authority derived from the law can transcend the source from whence it came."

33 Idaho at 462, 195 P. at 627 (emphasis added), cited with approval in Spaulding v. Childrens' Home Finding and Aid Society of North Idaho, Inc., 89 Idaho 10, 25, 402 P.2d 52, 67 (1965). We have also stated that "[a] void judgment is a nullity, and no rights can be based thereon; it can be set aside on motion or can be collaterally attacked at any time." Prather v. Loyd, 86 Idaho 45, 50, 382 P.2d 910, 915 (1963) (citations omitted).

Thus, the issue of whether a court has exceeded its jurisdiction is always open to collateral attack in Idaho. Hence, the Idaho district court may not grant res judicata effect to the Bankruptcy Court's order, because such an order would prevent any opportunity in the Idaho courts to contest whether the California court indeed had valid jurisdiction.

Where an order of a lower court is correct, but based upon an erroneous theory, the order will be affirmed upon the correct theory. Foremost Insurance Co. v. Putzier, 102 Idaho 138, 627 P.2d 317 (1981); Revello v. Revello, 100 Idaho 829, 606 P.2d 933 (1979); Eimco Corp. v. Sims, 100 Idaho 390, 598 P.2d 538 (1979); Anderson & Nafziger v. G.T. Newcomb, Inc., 100 Idaho 175, 595 P.2d 709 (1979). While we disagree with the theory upon which the trial court dismissed appellants' action, we affirm the trial court's order on principles of full faith and credit.

II.

Article IV, § 1 of the Constitution of the United States provides that "Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof."

This Court has previously held that "[t]he purpose of the full faith and credit clause is to integrate and unify the nation by according finality to a prior final judgment issued by another state or federal court." Mitchell v. Pincock, 99 Idaho 56, 57, 577 P.2d 343, 344 (1978). However, the United States Supreme Court has held that a judgment has no constitutional claim to a more conclusive or final effect in the forum state than it has in the rendering state. People ex rel. Halvey v. Halvey, 330 U.S. 610, 67 S.Ct. 903, 91 L.Ed. 1133 (1947); Reynolds v. Stockton, 140 U.S. 254, 11 S.Ct. 773, 35 L.Ed. 464 (1891). Because of this general principle, the recognition and enforcement of a sister state judgment under the full faith and credit clause rests upon the existence of several criteria: (A) a valid and (B) final judgment, which is (C) rendered on the merits of the case. Simonsen v. Simonsen, 414 S.W.2d 54 (Tex.Civ.App.1967); Roberts v. Hodges, 401 S.W.2d 332 (Tex.Civ.App.1966).

A(1).

For purposes of full faith and credit, a valid judgment itself consists of several factors. First, a valid judgment must have been rendered by a court of competent subject matter jurisdiction, and either jurisdiction over the person or persons whose rights are to be adjudicated, or over the res if the judgment purports to adjudicate interest in a tangible thing. People ex rel. Halvey v. Halvey, supra; Thorley...