Aspen Am. Ins. Co. v. E. Coast Precast & Rigging LLC
| Decision Date | 02 June 2021 |
| Docket Number | PC 19-5588,No. 2019-379-Appeal,2019-379-Appeal |
| Citation | 252 A.3d 249 |
| Parties | ASPEN AMERICAN INSURANCE COMPANY v. EAST COAST PRECAST & RIGGING LLC et al. |
| Court | Rhode Island Supreme Court |
Richard L. Gemma, Esq., for Plaintiff
Michael T. Eskey, Esq., Jennifer L. Sylvia, Esq., for Defendants
Present: Suttell, C.J., Goldberg, Robinson, and Lynch Prata, JJ.
The defendants, Lawrence Moses, Elizabeth Moses, and Lauren Moses,1 appeal in the wake of a Superior Court order denying their "motion to vacate" a foreign judgment (rendered in New York) in this action, which was brought in accordance with the Uniform Enforcement of Foreign Judgments Act—chapter 32 of title 9 of the Rhode Island General Laws. On appeal, the defendants contend that the hearing justice erred in denying their motion to vacate the New York judgment because "[u]nder a claim that the signatures of the * * * Defendants were unauthorized and forged, the Indemnity Agreement [at issue] with its consent-to-jurisdiction-in-New-York provision, cannot, standing alone, support a finding that the New York courts had in personam jurisdiction over the * * * Defendants."
This appeal came before the Supreme Court pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not be summarily decided. After a close review of the record and careful consideration of the parties’ arguments (both written and oral), we are satisfied that cause has not been shown and that this appeal may be decided at this time.
For the reasons set forth in this opinion, we affirm the order of the Superior Court.
The facts which form the basis of this action are largely uncontested. In relating those facts, we rely on the parties’ statements filed with this Court pursuant to Article I, Rule 12A of the Supreme Court Rules of Appellate Procedure and various documents in the record.
Jeremy Moses is the son of Lawrence and Elizabeth Moses and is the former husband of Lauren Moses.2 Jeremy owns a steel fabrication company called Heavy Metal Corp. (HMC). The plaintiff, Aspen American Insurance Co. (Aspen), issued "Payment and Performance Bonds" to HMC, which bonds were secured by a General Agreement of Indemnity (the Indemnity Agreement) executed in March of 2017 by HMC and by Jeremy and defendants as individual indemnitors. The Indemnity Agreement provides in pertinent part as follows:
The Indemnity Agreement included the purported signatures of defendants, all of which were notarized; it further included the following acknowledgment by the notary after each of defendants’ signatures: "On this 5 day of March 2017, before me personally appeared [the particular defendant whose signature appeared above the acknowledgment], to me known or proven to be the person described in and who executed the above Agreement and acknowledged that he or she executed said Agreement for the purposes, considerations and uses therein set forth as his or her free and voluntary act and deed."
Aspen has further alleged that HMC "encountered problems" in connection with certain construction projects, which resulted in Aspen being required to pay claims under the bonds. Aspen then made a demand upon Jeremy and defendants for payment under the Indemnity Agreement, which payments it did not receive.
Aspen, which is headquartered in New York, filed suit in New York against defendants and others under the Indemnity Agreement. Default judgment ultimately entered against defendants in New York. That default judgment noted that defendants in this action were served, but "failed to appear [and] answer or otherwise move against the complaint * * *." The default judgment directed that an assessment of damages occur at an "inquest." Following that inquest, judgment in Aspen's favor entered in New York against defendants in the amount of $301,378.49. There is no contention that defendants were not provided proper service in the New York litigation. Aspen then filed the authenticated New York judgment in the Superior Court for Providence County on May 10, 2019. It sought enforcement of the foreign judgment pursuant to the Uniform Enforcement of Foreign Judgments Act, chapter 32 of title 9.3
On July 2, 2019, defendants filed in Superior Court a motion to vacate the foreign judgment for lack of personal jurisdiction, alleging that they "never signed nor authorized anyone to sign the General Agreement of Indemnity."4 As such, according to defendants, the New York judgment was void ab initio . They also each submitted an affidavit stating that their signatures were forged, that they never signed the Indemnity Agreement, and that they had not authorized anyone to sign it on their behalf. Lawrence stated in his affidavit that he did not previously mention the forgery to Aspen or its counsel so as not to implicate his son Jeremy.
Aspen objected to the motion to vacate. It argued that defendants sent their 2016 and 2017 personal financial statements to Aspen through a broker or agent, thus satisfying New York's long-arm statute. Aspen further contended that defendants "engaged in actions objectively manifesting assent to the Indemnity Agreement" and that their conduct "for more than 3 years undermines their affidavits and creates an open issue to be resolved against them * * *."5
On July 18, 2019, a hearing took place before a justice of the Superior Court. In a bench decision rendered on August 2, 2019, the hearing justice denied defendants’ motion to vacate. The hearing justice began by noting that, under Rhode Island law, because defendants did not challenge personal jurisdiction in New York, they had a "heavy burden" to overturn the New York default judgment. She then detailed the applicable legal principles which would guide her determination as to whether or not New York had personal jurisdiction over defendants. Specifically, she looked to New York law with respect to alleged forgeries, and she noted that, under New York law, there is a "presumption of due execution" when a document includes the acknowledgment of a notary public, which presumption can only be rebutted by evidence of forgery that is "so clear and convincing as to amount to a moral certainty." She added that, under New York law, unsupported testimony of interested witnesses would not be sufficient to overcome the presumption of due execution. Finally, she concluded as follows:
An order denying the motion to vacate entered on August 20, 2019, and defendants filed a timely notice of appeal.
"The question of personal jurisdiction presents a mixed question[ ] of law and fact[.]" St. Onge v. USAA Federal Savings Bank , 219 A.3d 1278, 1282 (R.I. 2019) (internal quotation marks omitted). "[W]hen deciding mixed questions of law and fact that involve constitutional issues, our review is de novo ." Hawes v. Reilly , 184 A.3d 661, 665 (R.I. 2018) (internal quotation marks omitted); see also St. Onge , 219 A.3d at 1282. Therefore, "[o]ur review of a challenge to in personam jurisdiction is de novo ." Hawes , 184 A.3d at 665 ; see also St. Onge , 219 A.3d at 1282 ; Cerberus Partners, L.P. v. Gadsby & Hannah, LLP , 836 A.2d 1113, 1117 (R.I. 2003).
Underwriters National Assurance Co. v. North Carolina Life and Accident and Health Insurance Guaranty Association , 455 U.S. 691, 703-04, 102 S.Ct. 1357, 71 L.Ed.2d 558 (1982) (quoting U.S. Const. Art. IV, § 1 ).
The United States Supreme Court "has consistently recognized that, in order to fulfill this constitutional mandate, the judgment of a state court should have the same credit, validity, and effect, in every other court of the United States, which it had in the state where it was pronounced." Id. at 704, 102 S.Ct. 1357 (internal quotation marks omitted).6
However, the constitutional Full Faith and Credit principles are not without limitation. "[A] judgment of a court in one State is conclusive upon the merits in a court in another State only if the court in the first State had power to pass on the merits—had jurisdiction, that is, to render the judgment." Id. (internal quotation marks omitted). "Consequently, before a court is bound by the judgment rendered in another State, it may inquire into the jurisdictional basis of the foreign court's...
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Moses v. Aspen Am. Ins. Co.
...execution by a notary's signature. On appeal, the Rhode Island Supreme Court in Aspen Am. Ins. Co. v. East Coast Precast & Rigging, LLC, 252 A.3d 249, 257 (R.I. 2021) affirmed the Rhode Island Superior Court's decision and the validity of the N.Y. Judgment, holding, inter alia, that the Mos......